INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision B - Development allowance  

SECTION 82AHA   GOODS OR SERVICES USED TO PRODUCE EXEMPT INCOME  

82AHA(1)   [Definitions]  

In this section:

control
means effectively control.

goods
includes whatever is capable of being owned or used.

person
includes a person in the capacity of a trustee.

82AHA(2)    

82AHA(3)   [Where lessor deemed to have granted right]  

For the purposes of this Subdivision, a taxpayer shall be deemed to have granted a right to another person to use property (not being property that, in the case of a taxpayer being a leasing company, the taxpayer has leased to a person) if:

(a) the property was acquired by the taxpayer under a contract entered into after 26 February 1992 or was constructed by the taxpayer, construction having commenced after that date;

(b) at a time when the property is owned by the taxpayer, the property is, or is to be, used (whether or not by the taxpayer) wholly or partly in or in connection with the production, supply, carriage, transmission or delivery of goods or the provision of services;

(c) a person other than the taxpayer (which person is in this subsection referred to as the end-user ) controls, will control, or is or will be able to control, directly or indirectly, that use of the property; and

(d) either:

(i) in a case where some or all of the goods are, or are to be, produced for the end-user or supplied, carried, transmitted or delivered to or for the end-user, or some or all of the services are, or are to be, provided to or for the end-user - any of those goods or services are, or are to be, used by the end-user otherwise than wholly and exclusively for the purpose of producing assessable income; or

(ii) in relation to the production, supply, carriage, transmission or delivery of goods, or the provision of services, as mentioned in paragraph (b), the end-user derives, or is to derive, no income or income that is wholly or partly exempt from income tax.

82AHA(4)   [Where lessee deemed to have granted right]  

For the purposes of this Subdivision, a lessee of property shall be deemed to have entered into a contract or arrangement with another person for the use of the property by that other person if:

(a) the property was acquired by the lessor under a contract entered into after 26 February 1992 or was constructed by the lessor, construction having commenced after that date;

(b) while the lease is in force the property is, or is to be, used (whether or not by the lessee) wholly or partly in or in connection with the production, supply, carriage, transmission or delivery of goods or the provision of services;

(c) a person other than the lessee (which person is in this subsection referred to as the end-user ) controls, will control, or is or will be able to control, directly or indirectly, that use of the property; and

(d) either:

(i) in a case where some or all of the goods are, or are to be, produced for the end-user or supplied, carried, transmitted or delivered to or for the end-user, or some or all of the services are, or are to be, provided to or for the end-user - any of those goods or services are, or are to be, used by the end-user otherwise than wholly and exclusively for the purpose of producing assessable income; or

(ii) in relation to the production, supply, carriage, transmission or delivery of goods, or the provision of services, as mentioned in paragraph (b), the end-user derives, or is to derive, no income or income that is wholly or partly exempt from income tax.

82AHA(5)   [Where taxpayer became partner after 26 February 1992]  

Where:

(a) the individual interest of a taxpayer in the net income of a partnership has been or is to be included in the assessable income of the taxpayer of a year of income (in this subsection referred to as the relevant year of income ), or the individual interest of a taxpayer in a partnership loss has been allowed or is allowable as a deduction from the assessable income of the taxpayer of a year of income (in this subsection also referred to as the relevant year of income );

(b) a deduction (in this subsection referred to as the relevant deduction ) under this Subdivision in respect of a unit of eligible property was taken into account in calculating that net income or partnership loss;

(c) the relevant deduction would not have been taken into account for the purpose of that calculation if this section applied in relation to the property;

(d) this section does not apply in relation to the property by reason only that the property was acquired by the partnership under a contract entered into on or before 26 February 1992 or was constructed by the partnership, construction having commenced on or before that date; and

(e) the taxpayer became a partner in the partnership under a contract entered into by the taxpayer after that date;

there shall be included in the assessable income of the taxpayer of the relevant year of income an amount that bears to the amount of the relevant deduction the same proportion as the individual interest of the taxpayer in that net income bears to that net income or, as the case requires, as the individual interest of the taxpayer in that partnership loss bears to that partnership loss.

82AHA(6)   [Where taxpayer became partner before 26 February 1992]  

Where:

(a) the individual interest of a taxpayer in the net income of a partnership has been or is to be included in the assessable income of the taxpayer of a year of income (in this subsection referred to as the relevant year of income ), or the individual interest of a taxpayer in a partnership loss has been allowed or is allowable as a deduction from the assessable income of the taxpayer of a year of income (in this subsection also referred to as the relevant year of income );

(b) a deduction (in this subsection referred to as the relevant deduction ) under this Subdivision in respect of a unit of eligible property was taken into account in calculating that net income or partnership loss;

(c) the relevant deduction would not have been taken into account for the purpose of that calculation if this section applied in relation to the property;

(d) this section does not apply in relation to the property by reason only that the property was acquired by the partnership under a contract entered into on or before 26 February 1992 or was constructed by the partnership, construction having commenced on or before that date;

(e) the taxpayer became a partner in the partnership under a contract entered into by the taxpayer before that date;

(f) after that date, the taxpayer made or agreed to make a contribution or contributions (which contribution is or contributions are in this subsection referred to as the additional contribution ) to the capital of the partnership in addition to any contribution or contributions to the capital of the partnership that, under a contract or contracts entered into on or before that date, he had made or agreed to make; and

(g) by reason of making or agreeing to make the additional contribution, the individual interest of the taxpayer in that net income or partnership loss, being that individual interest expressed as a fraction of the aggregate of the individual interests of the partners in that net income or partnership loss, is greater than it would otherwise have been;

there shall be included in the assessable income of the taxpayer of the relevant year of income an amount ascertained in accordance with the formula

A (B   −   C),

where -

A is the amount of the relevant deduction;

B is the individual interest of the taxpayer in that net income or partnership loss being that individual interest expressed as a fraction of the aggregate of the individual interests of the partners in that net income or partnership loss; and

C is the fraction that would be B if another partner, and not the taxpayer, had made or agreed to make the additional contribution.

82AHA(7)   [Circumstances not limited by subsec (3) or (4)]  

Subsections (3) and (4) do not limit the circumstances in which a person shall, for the purposes of other provisions of this Subdivision, be taken to have granted a right to another person to use property or to have entered into a contract or arrangement with another person for the use of property by that other person.