INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision B - Development allowance  

SECTION 82AH   DISPOSAL ETC. OF PROPERTY AFTER 12 MONTHS AFTER INSTALLATION ETC.  

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

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;

(b) after the expiration of 12 months after the property was first used, or installed ready for use, by the taxpayer -

(i) the taxpayer disposed of the property;

(ii) the taxpayer:

(A) leased the property; or

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

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

(iii) the taxpayer used the property outside Australia or for a purpose other than the purpose of producing assessable income; and

(c) the Commissioner is satisfied that, at the time the property was acquired or constructed by the taxpayer, the taxpayer intended to dispose of the property, to lease the property, let the property on hire under a hire-purchase agreement or otherwise grant a right to another person to use the property, or to use the property as mentioned in subparagraph (b)(iii), after becoming entitled to a deduction under this Subdivision in respect of the property,

the deduction shall, if the Commissioner so determines, be deemed not to have been, or not to be, allowable, as the case may be.

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

Sub-subparagraphs (1)(b)(ii)(A) and (C) 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.

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

If the taxpayer is a company:

(a) sub-subparagraph (1)(b)(ii)(A) does not apply to the leasing of property to a related company; and

(b) sub-subparagraph (1)(b)(ii)(C) does not apply to the granting of rights to a related company to use property;

if the use of the property under the lease or grant was to take place while the related company remained a related company 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.

82AH(2)   [Disposal of part 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;

(b) after 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; and

(c) the Commissioner is satisfied that, at the time the property was acquired or constructed by the taxpayer, the taxpayer intended to dispose of the whole or a part of his interest in the property after becoming entitled to a deduction under this Subdivision in respect of the property;

then, if the Commissioner so determines, 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.

82AH(2A)    

82AH(2B)    

82AH(3)   [Disposal, etc, of leased property - lessor's deduction]  

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 being a leasing company of a year of income in relation to property leased by the taxpayer to another person (in this subsection referred to as the lessee );

(b) after the expiration of 12 months after the property was first used, or installed ready for use, by the lessee and before the expiration of the term of the lease:

(i) the taxpayer disposed of the property to a person other than the lessee;

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

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

(iv) 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;

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

(vi) 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; and

(c) the Commissioner is satisfied that, at the time when the lessee took the property on lease:

(i) in a case to which subparagraph (b)(i) applies - the leasing company intended to dispose of the property to a person other than the lessee before the expiration of the term of the lease; or

(ii) in a case to which subparagraph (b)(ii), (iii), (iv), (v) or (vi) applies - the lessee intended to use the property as mentioned in subparagraph (b)(ii), to cause the lease to be terminated as mentioned in subparagraph (b)(iii), to enter into a contract or arrangement as mentioned in subparagraph (b)(iv), to acquire and dispose of the property or to acquire the property and enter into a contract or arrangement as mentioned in subparagraph (b)(vi);

the deduction shall, if the Commissioner so determines, be deemed not to have been, or not to be, allowable, as the case may be.

82AH(3A)   [Application of subsec (3)(b)(iv) and (vi)]  

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

82AH(3B)   [Contract or arrangement with related company]  

Subparagraph (3)(b)(iv) or (vi) 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 1easing the property or otherwise granting a right to another person to use the property.

82AH(4)   [Disposal, etc, of leased property - lessee's deduction]  

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 taken on lease by the taxpayer;

(b) after the expiration of 12 months after the property was first used, or installed ready for use, by the taxpayer -

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

(ii) the lease was terminated otherwise than by the expiration of the term of the lease or the acquisition of the property by the taxpayer;

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

(iv) the taxpayer acquired the property and disposed of it; or

(v) the taxpayer acquired the property and entered into a contract or arrangement with another person for the use of the property by that other person; and

(c) the Commissioner is satisfied that, at the time when the taxpayer took the property on lease, the taxpayer intended to use the property as mentioned in subparagraph (b)(i), to cause the lease to be terminated as mentioned in subparagraph (b)(ii), to enter into a contract or arrangement as mentioned in subparagraph (b)(iii), to acquire and dispose of the property or to acquire the property and enter into a contract or arrangement as mentioned in subparagraph (b)(v),

the deduction shall, if the Commissioner so determines, be deemed not to have been, or not to be, allowable, as the case may be.

82AH(5)   [Application of subsec (4)(b)(iii) and (v)]  

Subparagraphs (4)(b)(iii) and (v) do not apply if the taxpayer entered into the contract or arrangement concerned in the taxpayer's capacity as an eligible entertainment/tourism operator.

82AH(6)   [Application of subsec (4)(b)(iii) and (v) where other person related company]  

Subparagraph (4)(b)(iii) or (v) does not apply if:

(a) the taxpayer is a company; and

(b) the other person is a related company of the taxpayer; 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 taxpayer 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.