Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 240 - Arrangements treated as a sale and loan  

Subdivision 240-F - The end of the arrangement  

Operative provisions

SECTION 240-90   What happens if the notional buyer ceases to have the right to use the property  

240-90(1)    
This section applies if, at the end of the *arrangement:

(a) the arrangement is not extended or renewed in the way mentioned in subsection 240-80(1) ; and

(b) no amount is paid to the *notional seller by, or on behalf of, the *notional buyer to acquire the property; and

(c) the property is not lost or destroyed.

240-90(2)    
The property is taken to have been disposed of by the *notional buyer by way of sale back to the *notional seller, and to have been acquired by the *notional seller, at the end of the *arrangement.

240-90(3)    

The consideration for the sale of the property by the *notional buyer, and the cost of the acquisition of the property by the *notional seller, are each taken to be equal to the *market value of the property at the end of the *arrangement.

240-90(4)    
Subsection (5) applies where the property is a *car and if it:

(a) had been bought from the notional seller, when this Division first applied to an *arrangement in respect of the car, by the *notional buyer for a price equal to the notional loan principal; and

(b) had been first used by the notional buyer for any purpose in the *financial year in which that time occurred;

the cost of the car, for the purpose of working out its decline in value for that person under Division 40 , would have been limited by section 40-230 .

240-90(5)    
Where an associate of the *notional buyer acquires the *car, the *cost of the car for the purposes of the application of Division 40 to the associate is taken to be whichever is the lesser of:

(a) the sum of:

(i) the amount that would have been the *adjustable value of the car at that time for the purposes of the application of that Division to the notional buyer if the notional buyer were not taken under this Division to have disposed of the car; and

(ii) any amount that is included in the notional buyer's assessable income under section 40-285 because the notional buyer is taken to have disposed of the car; or

(b) the cost of the acquisition of the car by the associate.