INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 4 - Leases  

SECTION 87   VALUE OF IMPROVEMENTS INCLUDED IN ASSESSABLE INCOME  

87(1)   [Improvements assessable to lessor]  

Where improvements, not subject to tenant rights, have been made upon any land by any person as consideration for the grant to him of a lease of that land, or by a lessee of the land who was required to make them under the provisions of the lease, or who made them with the written consent of the lessor, the following provisions shall apply:

(a) There shall be included in the lessor's assessable income of the year in which the improvements have been completed, and of each year thereafter until and including the year in which the lease expires, an instalment of the estimated value to the lessor of such improvements as at the expiration of the lease. The instalments shall be equal in amount and shall be such that, if received at the commencement of each of those years, they would, with interest at the rate prescribed, accumulate to a sum equal to the estimated value:

87(2)   [Agreements before commencement of Act]  

This section shall not apply where the agreement under which improvements were made as consideration for the grant of a lease was entered into before the commencement of this Act or where the lessee is required to make the improvements under the terms of a lease entered into before such commencement, or where the improvements are made in pursuance of a consent given before such commencement or in any of the cases specified in subsection 88(3) .

87(3)   [Lease of indefinite duration]  

For the purposes of the application of this section in relation to improvements made upon land which is the subject of a lease of indefinite duration, that lease shall be deemed to expire at the end of the period of 2 years commencing on the day after the day on which those improvements were completed.