• Can a right to use property be treated as a payment?

    The definition of payment in Division 7A includes a transfer of property. Property includes land, buildings, vehicles, tools, equipment and shares.

    A 'right to use' property can be a payment for Division 7A purposes where that right involves a transfer of property.

    For example, a right to use property that is made by way of a lease of real property involves a transfer of property to the lessee and is considered a payment for Division 7A purposes.

    Before the amendments that extended the meaning of 'payment', the use of assets under a licence or other right to use (other than a transfer or property) were not subject to Division 7A.

    The definition of payment has been extended to also include the provision of an asset on or after 1 July 2009 for use by a shareholder or their associate that does not involve a transfer of property. For information on the rules and exceptions in relation to the extended definition of payment, see Can the use of assets (other than a transfer of property) be treated as a payment?

      Last modified: 27 Jul 2016QC 17340