Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

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History

Part 3-10 inserted by No 72 of 2001.

Division 242 - Leases of luxury cars  

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History

Div 242 inserted by No 79 of 2010 , s 3 and Sch 3 item 2, effective 1 July 2010.

Subdivision 242-E - Extension, renewal and final ending of the lease  

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History

Subdiv 242-E inserted by No 79 of 2010 , s 3 and Sch 3 item 2, effective 1 July 2010.

Guide to Subdivision 242-E

SECTION 242-75   What this Subdivision is about  

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When a luxury car lease ends (whether it expires or is terminated before its expiry date), one of 3 things will happen:

(a) if the lease is extended or renewed - the original notional loan is treated as having been repaid and the lessor is treated as having made a new loan to the lessee; or

(b) if the lessee acquires the car from the lessor - the lessee continues to own the car for tax purposes, and the actual transfer and the termination payment to acquire the car are ignored for tax purposes; or

(c) if the lessee ' s right to use the car ends - the lessee is treated as having sold the car back to the lessor.

In each case, there may be adjustments under Subdivision 242-D to ensure that the right amount has been taxed over the term of the lease.

TABLE OF SECTIONS

TABLE OF SECTIONS

Operative provisions
242-80	What happens if the term of the lease is extended or the lease is renewed
242-85	What happens if an amount is paid by the lessee to acquire the car
242-90	What happens if the lessee stops having the right to use the car

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History

S 242-75 inserted by No 79 of 2010 , s 3 and Sch 3 item 2, effective 1 July 2010.

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