Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-10
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FINANCIAL TRANSACTIONS
Division 242
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Leases of luxury cars
Subdivision 242-E
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Extension, renewal and final ending of the lease
Guide to Subdivision 242-E
SECTION 242-75 What this Subdivision is about
(a) if the lease is extended or renewed
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the original notional loan is treated as having been repaid and the lessor is treated as having made a new loan to the lessee; or
(b) if the lessee acquires the car from the lessor
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the lessee continues to own the car for tax purposes, and the actual transfer and the termination payment to acquire the car are ignored for tax purposes; or
(c) if the lessee
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s right to use the car ends
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the lessee is treated as having sold the car back to the lessor.
View history note
Hide history noteSECTION 242-75 What this Subdivision is about
When a luxury car lease ends (whether it expires or is terminated before its expiry date), one of 3 things will happen:
In each case, there may be adjustments under Subdivision 242-D to ensure that the right amount has been taxed over the term of the lease.
| Operative provisions | |
| 242-80 | What happens if the term of the lease is extended or the lease is renewed |
| 242-85 | What happens if an amount is paid by the lessee to acquire the car |
| 242-90 | What happens if the lessee stops having the right to use the car |
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