Taxation Laws Amendment Act 1994 (56 of 1994)

Part 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 2   Tax-exempt infrastructure borrowings

17   Direct infrastructure borrowing-requirement relating to use of facilities on which borrowed money is to be spent

Section 159GZZZZB of the Principal Act is amended by omitting subsection (2) and substituting the following subsection:

"(2) For the purposes of paragraph (1)(a), if the borrower intends that any of the facilities concerned will be a fixture on land that is the subject of a Crown lease and:

(a) if the Crown lease is a lease of land granted under a statutory law of the Commonwealth, of a State or of a Territory-it can reasonably be expected, when the borrowing takes place, that the Crown lease will run, or (because of law, custom or otherwise) be extended or renewed to run, for at least the 25 year assessable use period; or

(b) in any other case-at the time (the 'relevant time') when the first of the facilities begins to be constructed:

(i) if the term of the lease will not end before the last day of the 25 year assessable use period-both the lessor and the lessee intend that the lessee will continue to hold the lease throughout the whole of that period on the same terms and conditions as those on which the lease is held at the relevant time; or

(ii) if the term of the lease will end before the last day of the 25 year assessable use period:

(A) the lessee has an option to renew the lease on the terms and conditions referred to in subparagraph (i) for a period that will not end, or has successive options to renew the lease on those terms and conditions for periods the last of which will not end, before the last day of the 25 year assessable use period; and

(B) both the lessor and the lessee intend that the lessee will continue to hold the lease throughout the whole of that period on the same terms and conditions as those on which the lease is held at the relevant time;

then the borrower is taken to intend to own the facility concerned.".