INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision B - Development allowance  

SECTION 82AB   DEDUCTION FOR NEW PLANT INSTALLED AFTER 26 FEBRUARY 1992  

82AB(1)   [Allowable deduction]  

Subject to this Subdivision, if:

(a) after 26 February 1992, a taxpayer incurs expenditure of a capital nature in respect of the acquisition or construction by the taxpayer of a new unit of eligible property to which this Subdivision applies; and

(b) the expenditure has pre-qualified under the Development Allowance Authority Act 1992 ; and

(c) the expenditure was incurred:

(i) in respect of a unit of property acquired by the taxpayer under a contract entered into after 26 February 1992; or

(ii) in respect of a unit of property that was constructed by the taxpayer where the construction commenced after 26 February 1992; and

(d) the unit of property was first used or installed ready for use before 1 July 2002;

a deduction equal to 10% of the expenditure is allowable to the taxpayer for the first year of income during which that unit was either used for the purpose of producing assessable income or installed ready for use for that purpose.

82AB(1A)    

82AB(2)    

82AB(3)    

82AB(4)    

82AB(5)    

82AB(5A)    

82AB(5B)    

82AB(6)   [Leased property - use or installation]  

A reference in subsection (1) to use, or to the installation ready for use, of a unit of property shall, in the case of a unit of property to which paragraph 82AA(1)(b) applies, be construed as a reference to use, or to installation ready for use, of the unit of property by the lessee.

82AB(6A)    

82AB(6B)    

82AB(7)   [Lease-back transactions]  

Where:

(a) a leasing company leases to another person (in this subsection referred to as the lessee ) property acquired by the leasing company from that other person;

(b) the leasing company would not, but for this subsection, be entitled to a deduction under this Subdivision in respect of the property by reason only that, before the property was acquired by the leasing company, it was used, or held for use, by the lessee;

(c) the period during which the property was used, or held for use, by the lessee before the property was acquired by the leasing company did not exceed 6 months; and

(d) the Commissioner is satisfied that the acquisition or construction of the property by the lessee, the acquisition of the property by the leasing company from the lessee and the leasing of the property by the leasing company to the lessee occurred in pursuance of a contract or arrangement entered into on or after 27 February 1992 and that the leasing company and the lessee entered into the contract or arrangement at arm's length;

then, for the purposes of this Subdivision, the expenditure by the leasing company in respect of its acquisition of the property shall be deemed to have been incurred in respect of the acquisition of a new unit of property and, if the lease of the property by the leasing company to the lessee was entered into after the property was first used, or installed ready for use, by the lessee, the property shall be deemed to have been first used, or installed ready for use, by the lessee on the date on which the lease agreement was entered into.

82AB(8)   [Lease contract before 27 February 1992]  

A deduction is not allowable under this Subdivision in respect of expenditure incurred by a taxpayer in respect of the acquisition or construction of a unit of property that is leased by the taxpayer to another person (in this subsection referred to as the lessee ) if, before 27 February 1992, the taxpayer entered into a contract or arrangement to lease the property to the lessee or to a third person.

82AB(9)    

82AB(10)