INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 5 - Leases  

SECTION 160ZW   ACQUISITION BY LESSEE OF REVERSIONARY INTEREST OF LESSOR  

160ZW(1)   [Application of section]  

Where:

(a) the lessee under a lease of land acquires the reversionary interest of the lessor in the land; and

(b) section 160ZWA does not apply in respect of that acquisition;

the following provisions of this section have effect for the purposes of this Part.

160ZW(2)   [Perpetual lease or with term of at least 99 years]  

If the lease was granted in perpetuity or for a term of not less than 99 years, the former lessee shall be deemed to have acquired the asset constituted by the merger of the lease and the reversionary interest at the time when the lease was granted, or assigned, to the former lessee and to have paid as consideration for the acquisition of that asset the sum of any premium paid by the former lessee for the grant or assignment of the lease and any amount paid for the acquisition of the reversionary interest.

160ZW(3)   [Other leases]  

In the case of a lease to which subsection (2) does not apply -

(a) where the former lessee acquired the lease, whether by grant or assignment, before 20 September 1985, the former lessee shall be deemed to have acquired the asset constituted by the merger of the lease and the reversionary interest at the time when the merger took place and to have paid as consideration for the acquisition an amount equal to the market value of that asset at that time; or

(b) where the former lessee acquired the lease, whether by grant or assignment, on or after 20 September 1985, the former lessee shall be deemed to have acquired the asset constituted by the merger of the lease and the reversionary interest at the time when the merger took place and to have paid as consideration for the acquisition the sum of any premium paid by the former lessee for the grant or assignment of the lease and any amount paid for the acquisition of the reversionary interest.