Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 16D - Certain arrangements relating to the use of property  

SECTION 159GN   EFFECT OF USE OF PROPERTY UNDER QUALIFYING ARRANGEMENT FOR PRODUCING ASSESSABLE INCOME  

159GN(1)   [Joint use by exempt public body and others]  

Where:

(a) this Division applies in relation to an item of eligible property by reason of the application of subparagraph 159GH(1)(b)(i) in relation to the use by an exempt public body, or the control by an exempt public body of the use, of the item of eligible property under a qualifying arrangement;

(b) the exempt public body jointly uses, or jointly controls the use of, the item of eligible property together with another person, or one or more other persons, who are not exempt public bodies;

(c) the item of eligible property is or will be used during the arrangement period in relation to the qualifying arrangement for producing income of an amount that, having regard to the provisions of the qualifying arrangement and any other relevant circumstances, is not likely to be less than the total amount of the arrangement payments under the qualifying arrangement in relation to the item of eligible property; and

(d) the income, or a part of the income, referred to in paragraph (c) will be included in the assessable income of one or more persons (which person, or each of which persons, is in this subsection referred to as an assessable person ),

the following provisions have effect:

(e) where all of the income referred to in paragraph (c) will be included in the assessable income of one or more persons - sections 159GJ and 159GK do not apply in relation to the item of eligible property;

(f) where paragraph (e) does not apply:

(i) there is allowable to a taxpayer so much of any deduction that, but for this section, would not, by reason of the application of section 159GJ , be allowable to the taxpayer in relation to any eligible amount in relation to the item of eligible property in respect of the application period as is ascertained in accordance with the formula

AB

where:
A is the amount of the deduction that, but for this section would not, by reason of the application of section 159GJ , be allowable to the taxpayer; and
B is the assessable person fraction for the purposes of the application of this Division concerned;

(ii) for the purposes of section 159GJ , a reference in that section to the total notional principal in relation to an eligible amount in relation to the item of eligible property in respect of the application period shall be taken to be a reference to the amount that, but for this subparagraph, would be the total notional principal, as increased by the amount of any deduction allowable under subparagraph (i) of this paragraph in relation to the eligible amount in respect of the application period; and

(iii) for the purposes of the application of section 159GK , any eligible amount in relation to the item of property in respect of the application period shall be ascertained in accordance with the formula

AB

where:
A is the amount that, but for this section, would be the eligible amount; and
B is the non-assessable person fraction in relation to the application of this Division concerned.

159GN(2)   [Assessable person fraction, non-assessable person fraction]  

For the purposes of subsection (1):

(a) a reference in that subsection to the assessable person fraction in relation to an application of this Division in relation to an item of eligible property is a reference to the interest of all of the assessable persons in the income referred to in paragraph (1)(c) expressed as a fraction of the interests of all of the persons entitled to that income; and

(b) a reference in that subsection to the non-assessable person fraction in relation to an application of this Division in relation to an item of eligible property is a reference to the fraction ascertained by subtracting the assessable person fraction in relation to that application of this Division in relation to the item of eligible property from the number 1.

159GN(3)   [Overseas use producing exempt and assessable income]  

Where:

(a) this Division applies in relation to an item of eligible property by reason of the application of subparagraph 159GH(1)(b)(ii) in relation to the use of the item of property outside Australia partly for the purpose of producing exempt income; and

(b) that use is also partly for the purpose of producing assessable income,

the following provisions have effect:

(c) there is allowable to a taxpayer so much of any deduction that, but for this section, would not, by reason of the application of section 159GJ , be allowable to the taxpayer in relation to any eligible amount in relation to the item of eligible property in respect of the application period as is ascertained in accordance with the formula

AB

where:
A is the amount of the deduction that, but for this section would not, by reason of the application of section 159GJ , be allowable to the taxpayer; and
B is the assessable income fraction for the purposes of the application of this Division concerned;

(d) for the purposes of section 159GJ , a reference in that section to the total notional principal in relation to an eligible amount in relation to the item of eligible property in respect of the application period shall be taken to be a reference to the amount that, but for this paragraph, would be the total notional principal, as increased by the amount of any deduction allowable under paragraph (c) of this subsection in relation to the eligible amount in respect of the application period; and

(e) for the purposes of the application of section 159GK , any eligible amount in relation to the item of property in respect of the application period shall be ascertained in accordance with the formula

AB

where:
A is the amount that, but for this section, would be the eligible amount; and
B is the exempt income fraction in relation to the application of this Division concerned.

159GN(4)   [Assessable income fraction, non-assessable income fraction]  

For the purposes of subsection (3):

(a) a reference in that subsection to the assessable income fraction in relation to an application of this Division in relation to an item of eligible property is a reference to the amount of the assessable income referred to in paragraph (3)(b) expressed as a fraction of the sum of that assessable income and the exempt income referred to in paragraph (3)(a); and

(b) a reference in that subsection to the exempt income fraction in relation to an application of this Division in relation to an item of eligible property is a reference to the fraction ascertained by subtracting the assessable income fraction in relation to that application of this Division in relation to the item of eligible property from the number 1.