CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-10
-
FINANCIAL TRANSACTIONS
History
Part 3-10 inserted by No 72 of 2001.
Division 250
-
Assets put to tax preferred use
History
Div 250 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007.
No 164 of 2007
, s 3 and Sch 1 item 71 contains the following application provision:
Application
(1)
Subject to subitems (4), (6) and (8), Division 250 applies in relation to a tax preferred use of an asset if, and only if, the tax preferred use:
(a)
starts on or after 1 July 2007; and
(b)
does not occur under a legally enforceable arrangement that was entered into before 1 July 2007.
(2)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
but for this subitem:
(i)
section
51AD
would apply to the asset in relation to a taxpayer; or
(ii)
Division
16D
would apply to the asset; and
(d)
you elect to have this subitem apply to the asset.
(3)
An election under paragraph (2)(d) in relation to an asset that is put to a tax preferred use:
(a)
must be made by the day you lodge your income tax return for the income year in which the tax preferred use starts; and
(b)
must be made for the whole of the arrangement period for the tax preferred use of the asset; and
(c)
must extend to all assets that are, or are to be, put to a tax preferred use under the arrangement under which the asset is put to that use; and
(d)
is irrevocable.
(4)
If subitem (2) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset.
(5)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(d)
the arrangement referred to in paragraph (b) is materially altered on or after 1 July 2007; and
(e)
but for this subitem and subitem (6):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
For the purposes of applying paragraph (c), assume that the asset was in existence and was being put to the tax preferred use immediately before 1 July 2007.
(6)
If subitem (5) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(7)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use started before 1 July 2007; and
(b)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(c)
the arrangement under which the tax preferred use of the asset occurs is materially altered on or after 1 July 2007; and
(d)
but for this subitem and subitem (8):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
(8)
If subitem (7) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(9)
For the purposes of applying subparagraphs (5)(c)(ii) and (e)(ii) and (7)(b)(ii) and (d)(ii), disregard the operation of section
159GL
of the
Income Tax Assessment Act 1936
.
(10)
For the purposes of applying Division 250 to the tax preferred use of an asset in accordance with subitem (6) or (8), the
arrangement period
for the tax preferred use of the asset is taken to start on the day on which the alteration referred to in paragraph (5)(d) or (7)(c) occurs.
(11)
Section
51AD
does not apply to an asset for the income year commencing on 1 July 2007, or a later income year, if:
(a)
the asset is put to a tax preferred use under a legally enforceable arrangement; and
(b)
the arrangement was entered into before 1 July 2007; and
(c)
the tax preferred use of the asset starts on or after 1 July 2003 and before 1 July 2007.
…
(13)
In this item:
arrangement
has the same meaning as in the
Income Tax Assessment Act 1997
.
asset
includes property (within the meaning of section
51AD
and Division
16D
).
Division 16D
means Division
16D
of Part
III
of the
Income Tax Assessment Act 1936
.
Division 250
means Division 250 of the
Income Tax Assessment Act 1997
.
section 51AD
means section
51AD
of the
Income Tax Assessment Act 1936
.
tax preferred use
has the same meaning as in the
Income Tax Assessment Act 1997
.
Subdivision 250-D
-
Deemed loan treatment of financial benefits provided for tax preferred use
History
Subdiv 250-D inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
SECTION 250-180
End value
of asset
250-180(1)
The
end value
of an asset is worked out in accordance with this section.
250-180(2)
If the asset has a *guaranteed residual value, the
end value
of the asset is:
(a)
the amount of the guaranteed residual amount if subparagraph
250-15(d)(i)
applies; or
(b)
so much of the amount referred to in paragraph (a) as is attributable to the expenditure referred to in subparagraph
250-15(d)(ii)
if that subparagraph applies.
250-180(3)
If the asset does not have a *guaranteed residual value and is a *depreciating asset, the
end value
of the asset is:
(a)
if subparagraph
250-15(d)(i)
applies
-
the amount that would have been the *adjustable value of the asset at the end of the *arrangement period if:
(i)
this Division had not applied to you and the asset; and
(ii)
the decline in the asset
'
s value were worked out on the basis of the asset
'
s *effective life and using the *prime cost method; or
(b)
if subparagraph
250-15(d)(ii)
applies
-
so much of the amount referred to in paragraph (a) as is attributable to the expenditure referred to in that subparagraph.
250-180(4)
Disregard section
40-102
in working out the asset
'
s *effective life for the purposes of subparagraph (3)(a)(ii).
250-180(5)
If neither subsection (2) nor subsection (3) applies and an estimate of the value of the asset is recognised for accounting purposes, the
end value
of the asset is:
(a)
the value of the relevant asset at the end of the *arrangement period that would be recognised for accounting purposes if subparagraph
250-15(d)(i)
applies; or
(b)
so much of the value of referred to in paragraph (a) as is attributable to the expenditure referred to subparagraph
250-15(d)(ii)
if that subparagraph applies.
The
end value
must not, however, exceed the amount worked out under subsections
250-155(4)
and
(5)
(amount taken to have been lent).
[
CCH Note:
The wording of s 250-180(5)(b) reflects the wording in Act
No 164 of 2007
as assented.]
250-180(6)
If none of subsections (2), (3) and (5) apply to the asset, the
end value
of the asset is:
(a)
a reasonable estimate of the *market value of the asset at the end of the *arrangement period if subparagraph
250-15(d)(i)
applies; or
(b)
so much of the estimate referred to in paragraph (a) as is attributable to the expenditure referred to in subparagraph
250-15(d)(ii)
if that subparagraph applies.
The
end value
must not, however, exceed the amount worked out under subsections
250-155(4)
and
(5)
(amount taken to have been lent).
History
S 250-180 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
View history note
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