Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision A - Assessable income generally  

SECTION 26AB   ASSESSABLE INCOME - PREMIUM FOR LEASE  

26AB(1A)    

For the purposes of assessments for the 1997-98 year of income and later years of income, this section applies only in relation to assignments of leases granted before 20 September 1985.

Note:

The Income Tax Assessment Act 1997 does not contain a rewritten version of this section.

For the 1998-99 year of income and later years of income, Parts 3-1 and 3-3 (about CGT) deal with the income tax treatment of premiums for:

• granting leases; and

• assigning leases granted on or after 20 September 1985.

For the 1997-98 year of income, former Part IIIA of this Act (about CGT) dealt with the income tax treatment of such premiums.

26AB(1)    
In this section, premium means a consideration payable in one amount, or each amount of a consideration payable in more than one amount, where the consideration is:

(a) in the nature of a premium, fine or foregift payable for or in connexion with the grant or assignment of a lease; or

(b) for or in connexion with an assent to the grant or assignment of a lease;

but does not include an amount in respect of goodwill or a licence.

26AB(2)    
Where, in the year of income, a taxpayer receives a premium that relates to the grant or assignment of a lease of property that was not, at the date on which the agreement to grant or assign the lease was made, or the assent to the grant or assignment of the lease was given, as the case may be, intended by the grantee or assignee to be used by the grantee or the assignee or some other person wholly or partly for the purpose of gaining or producing assessable income, the assessable income of the taxpayer shall include the premium.

26AB(3)    
Where, in the year of income, a taxpayer receives a premium that relates to the grant or assignment of a lease of property that was, at the date on which the agreement to grant or assign the lease was made, or the assent to the grant or assignment of the lease was given, as the case may be, intended by the grantee or assignee to be used by the grantee or assignee or some other person partly for the purpose of gaining or producing assessable income and partly for other purposes, the assessable income of the taxpayer shall include such part of the premium as the Commissioner considers may reasonably be attributed to the intended use of the property for purposes other than gaining or producing assessable income.

26AB(4)    

Where, in a case referred to in subsection (2) or (3), the taxpayer satisfies the Commissioner that, at the date on which the agreement to grant or assign the lease was made, or the assent to the grant or assignment of the lease was given, as the case may be, the taxpayer believed on reasonable grounds that the grantee or assignee intended a particular use of the property by the grantee or assignee or some other person for the purpose of gaining or producing assessable income, the Commissioner may apply this section on the basis that that intention existed.

26AB(5)    

This section does not apply in relation to:

(a) (Repealed by No 101 of 2006 )

(b) a premium received in connexion with the assignment of a lease of land granted under a law of a State or Territory relating to mining;

(c) a premium received in connexion with the grant or assignment of a lease that was, for the purposes of former section 88B , a grant or assignment for mining purposes; or

(d) a premium received in connexion with the assignment from the Commonwealth or a State of a lease:

(i) granted in perpetuity or for a term not less than 99 years; or

(ii) with a right of purchase; or

(iii) effecting improvements to be used for residential purposes only.