INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART XII - DROUGHT INVESTMENT ALLOWANCE  

Division 3 - Leasing company deduction  

Subdivision B - Loss of entitlement to deduction  

SECTION 645   DISPOSAL ETC. OF ITEM AFTER 12 MONTHS  

645(1)   Loss of entitlement.  

Subject to subsection (3), the taxpayer is not entitled to the deduction if subsection (2) applies and, 12 months or more after the item of drought mitigation property is first used, or installed ready for use, by the lessee but before the end of the term of the lease:

(a) the taxpayer disposes of the item to a person other than the lessee; or

(b) the lessee uses the item outside Australia or for a purpose other than that of producing assessable primary production income; or

(c) the lease is terminated other than by the lessee acquiring the item; or

(d) the lessee enters into a contract or arrangement with another person for the use of the item by that other person; or

(e) the lessee acquires the item and disposes of it; or

(f) the lessee acquires the item and enters into a contract or arrangement with another person for the use of the item by the other person.

645(2)   Additional requirement for loss.  

For the taxpayer not to be entitled, it is also necessary that, when the lessee took the item on lease:

(a) the taxpayer intended to dispose of the item; or

(b) the lessee intended to do the thing mentioned in paragraph (1)(b), (d), (e) or (f); or

(c) the lessee intended to cause the lease to be terminated as mentioned in paragraph (1)(c);

as the case requires.

645(3)   Commissioner may determine that entitlement not wholly lost.  

If the Commissioner determines that the taxpayer should not lose the entitlement to the whole or part of the deduction, this section does not apply to the whole or the part.