INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision B - Development allowance  

SECTION 82AG   DISPOSAL ETC. OF PROPERTY WITHIN 12 MONTHS AFTER INSTALLATION ETC.  

82AG(1)   [Disposal, etc, of acquired property]  

This Subdivision does not apply, and shall be deemed never to have applied, in relation to property acquired or constructed by a taxpayer, not being property that, in the case of a taxpayer being a leasing company, the taxpayer has leased to another person, if, before the expiration of 12 months after the property was first used, or installed ready for use, by the taxpayer:

(a) the taxpayer disposed of the property or the property was lost or destroyed;

(b) the taxpayer:

(i) leased the property; or

(ii) let the property on hire under a hire-purchase agreement; or

(iii) otherwise granted a right to another person to use the property; or

(c) the taxpayer used the property outside Australia or for a purpose other than the purpose of producing assessable income.

82AG(1A)   [Property used in entertainment/tourism operations]  

Subparagraphs (1)(b)(i) and (iii) do not apply if the taxpayer leased the property, or granted rights to use the property, in the taxpayer's capacity as an eligible entertainment/tourism operator.

82AG(1B)   [Use of property by related company]  

If the taxpayer is a company:

(a) subparagraph (1)(b)(i) does not apply to the leasing of property to a related company; and

(b) subparagraph (1)(b)(iii) does not apply to the granting of rights to a related company to use property;

if, at all times during the period ending at the earlier of:

(c) the end of the term of the lease or period of the grant; and

(d) the end of the period of 12 months mentioned in subsection (1);

the related company remains a related company and uses the property wholly and exclusively both in Australia and for the purpose of producing assessable income other than by leasing the property or otherwise granting a right to another person to use the property.

82AG(2)   [Disposal of part of interest]  

Where -

(a) a deduction has been allowed, or would but for this subsection be allowable, under this Subdivision from the assessable income of a taxpayer of a year of income in relation to property acquired or constructed by the taxpayer, not being property that, in the case of a taxpayer being a leasing company, the taxpayer has leased to another person; and

(b) before the expiration of 12 months after the property was first used, or installed ready for use, by the taxpayer, the taxpayer disposed of a part of his interest in the property,

so much of the deduction as the Commissioner considers appropriate shall be deemed not to have been, or not to be, allowable, as the case may be.

82AG(2A)    

82AG(2B)    

82AG(3)   [Disposal, etc, of leased property]  

This Subdivision does not apply, and shall be deemed never to have applied, in relation to property leased by a leasing company to another person (in this subsection referred to as the lessee ) if, before the expiration of 12 months after the property was first used, or installed ready for use, by the lessee -

(a) the property was disposed of by the leasing company to a person other than the lessee or was lost or destroyed;

(b) the lessee used the property outside Australia or for a purpose other than the purpose of producing assessable income;

(c) the lease was terminated otherwise than by the acquisition of the property by the lessee;

(d) while the lease was in force the lessee entered into a contract or arrangement with another person for the use of the property by that other person;

(e) the lessee acquired the property and disposed of it; or

(f) the lessee acquired the property and entered into a contract or arrangement with another person for the use of the property by that other person.

82AG(3A)   [Application of subsec (3)(d) and (f)]  

Paragraphs (3)(d) and (f) do not apply if the lessee entered into the contract or arrangement concerned in the lessee's capacity as an eligible entertainment/tourism operator.

82AG(3B)   [Contract of arrangement with related company]  

Paragraph (3)(d) or (f) does not apply if:

(a) the lessee is a company; and

(b) the other person is a related company of the lessee; and

(c) at all times during the period ending at the earlier of:

(i) the end of the term of the contract or arrangement; and

(ii) the end of the.12 months mentioned in subsection (3);

the other person was a related company of the lessee and used the property wholly and exclusively both in Australia and for the purpose of producing assessable income other than by leasing the property or otherwise granting a right to another person to use the property.

82AG(4)   [Agreement for use made before lease commenced]  

This Subdivision does not apply, and shall be deemed never to have applied, in relation to property leased by a leasing company to another person (in this subsection referred to as the lessee ) if, before the property was leased to the lessee by the leasing company, the lessee entered into a contract or arrangement with another person for the use of the property by that other person.

82AG(5)   [Application of subsec (4)]  

Subsection (4) does not apply if the lessee entered into the contract or arrangement concerned in the lessee's capacity as an eligible entertainment/tourism operator.

82AG(6)   [Agreement with related company before lease commenced]  

Subsection (4) does not apply if:

(a) the lessee is a company; and

(b) the other person is a related company of the lessee; and

(c) the use of the property under the contract or arrangement was to take place while the other person remained a related company of the lessee and was to be wholly and exclusively both in Australia and for the purpose of producing assessable income other than by leasing the property or otherwise granting a right to another person to use the property; and

(d) at all times during the period ending at the earlier of:

(i) the end of the term of the contract or arrangement; and

(ii) the end of the 12 months after the property was first used, or installed ready for use, by the lessee;

the requirements of paragraph (c) were satisfied in relation to the use of the property.