INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision G - Limitation on deductions for interest on money borrowed to finance rental property investments  

SECTION 82KZJ   WHEN PROPERTY ACQUIRED  

82KZJ(1)   [Acquisition pre-18/7/85]  

For the purposes of the application of this Subdivision in relation to the taxpayer in relation to an eligible year of income, property acquired by the taxpayer on or before the commencement date and held by the taxpayer during the whole or a part of the eligible period shall be deemed to have been acquired by the taxpayer after the commencement date unless the Commissioner is satisfied, or considers it reasonable to assume that, at all times during the eligible period when the property was held by the taxpayer, majority underlying interests in the property were held by natural persons who, immediately before the transitional date, held majority underlying interests in the property.

82KZJ(2)   [Acquisition on partnership formation, dissolution or variation]  

For the purposes of this Subdivision, but subject to subsection (1), where, by reason of:

(a) the formation or dissolution of a partnership; or

(b) a variation in the constitution of a partnership, or in the interests of the partners,

property is deemed by section 82KZH to have been acquired by the taxpayer after the commencement date and before the transitional date, the property shall be deemed to have been acquired by the taxpayer before the commencement date if the Commissioner is satisfied that:

(c) immediately after the property was acquired by the taxpayer, an underlying interest in the property was held by a natural person who held an underlying interest in the property at the end of the commencement date; and

(d) the person or persons from whom the taxpayer acquired the property acquired the property on or before the commencement date.

82KZJ(3)   [Acquisition on death of another]  

For the purposes of this Subdivision, but subject to subsection (1), where, in a case to which subsection (2) does not apply, property is acquired by the taxpayer after the commencement date and before the transitional date by reason of the death of another person, the property shall be deemed to have been acquired by the taxpayer at the time when it was acquired by the deceased person.

82KZJ(4)   [Acquisition post-25/9/85]  

For the purposes of this Subdivision but subject to subsection (1), property acquired by the taxpayer on or after the transitional date shall be deemed to have been acquired by the taxpayer before the commencement date if:

(a) the Commissioner is satisfied that:

(i) immediately after the property was acquired by the taxpayer, majority underlying interests in the property were held by natural persons who, immediately before the transitional date, held majority underlying interests in the property; and

(ii) the person or persons from whom the taxpayer acquired the property acquired the property on or before the commencement date;

(b) where the person or persons from whom the taxpayer acquired the property did not borrow and use money to acquire the property - the taxpayer did not borrow and use money to acquire the property; and

(c) where the person or persons from whom the taxpayer acquired the property borrowed and used money to acquire the property - the amount of that borrowed money outstanding immediately before the acquisition of the property by the taxpayer was not less than the amount (if any) borrowed and used by the taxpayer to acquire the property.

82KZJ(5)   [Percentage of total underlying interest acquired by reason of death]  

For the purposes of this section, where, by reason of the death of a person, a natural person acquires a percentage (in this subsection referred to as the acquired percentage ) of the total underlying interests in property, the natural person shall be deemed to have held (in addition to any other part of the total underlying interests that the person held or is deemed to have held), at any time when the deceased person held a percentage (in this subsection referred to as the deceased person's percentage ) of the total underlying interests in the property, a percentage of the total underlying interests in the property equal to the acquired percentage, or the deceased person's percentage at that time, whichever is the less.

82KZJ(6)   [``eligible period'']  

For the purposes of the application of this section in relation to a year of income, eligible period means the period commencing on the transitional date and ending at the end of the year of income.

82KZJ(7)   [``eligible year of income'']  

In this section, eligible year of income means the year of income in which the transitional date occurred or a subsequent year of income.