Income tax: depreciation of trading ships purchased under hire purchase agreements
Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.This document has been Withdrawn.View the Withdrawal notice for this document.
FOI status:may be releasedFOI number: I 1218646
Section 57AM of the Income Tax Assessment Act provides an income tax deduction for depreciation on eligible Australian trading ships. At the very threshold of the definition of the expression "eligible trading ship" in sub-section 57AM(4) is the reference to "a ship or new ship owned by a taxpayer".
3. Although a hirer is not the legal owner of property during the term of the hire purchase agreement it has been the practice of this office for many years to treat a hirer, under a hire purchase agreement, as the owner of plant for the purposes of the general depreciation provisions in the income tax law.
COMMISSIONER OF TAXATION
25 June 1987