Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 242 - Leases of luxury cars  

Subdivision 242-A - Notional sale and loan  

Operative provisions

SECTION 242-10   Application  

242-10(1)    
This Division applies to a *car that:

(a) is leased (but not under a *short-term hire agreement or a *hire purchase agreement) for consideration; and

(b) was a *luxury car when the lessor first leased it; and

(c) is not *trading stock of the lessee; and

(d) is not a car covered by subsection 40-230(2) (about cars modified to carry individuals with a disability).

242-10(2)    
The provisions of this Division do not have effect for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936 (about withholding tax on dividends, interest and royalties.

Note:

This subsection prevents interest on the notional loan that this Division creates being subject to withholding tax under Division 11A .

242-10(3)    
For the purposes of paragraph (1)(a), the question whether an agreement is a *short-term hire agreement is determined on the basis that an employee or employer of an entity is an *associate of the entity.

Note:

Under the definition of short-term hire agreement in subsection 995-1(1) , successive agreements for the hire of the same asset to an entity or its associates are not short-term hire agreements if they result in substantial continuity of hiring.