Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 250 - Assets put to tax preferred use  

Subdivision 250-B - When this Division applies to you and an asset  

Overall test

SECTION 250-40   Fourth exclusion - sum of present values of financial benefits less than amount otherwise assessable  

250-40(1)  
This Division does not apply to you and an asset that is being *put to a tax preferred use under a particular *arrangement if, when that *tax preferred use of the asset starts, the Division 250 assessable amount is less than the alternative assessable amount.

250-40(2)  
For the purposes of subsection (1), the Division 250 assessable amount is the sum of the present values of all the amounts that would be likely to be included in your assessable income under this Divison in relation to the *tax preferred use of the asset if this Division applied to you and the asset.

250-40(3)  
This is how to work out the alternative assessable amount for the purposes of subsection (1): Method statement


Step 1.

Add up the present values of the amounts that would be included in your assessable income in relation to the *financial benefits *provided in relation to the tax preferred use of the asset during the *arrangement period if this Division did not apply to you and the asset.


Step 2.

Add up the present values of the amounts that you would be able to deduct in relation to the asset, or expenditure in relation to the asset, under Division 40 or Division 43 in relation to the *arrangement period if this Division did not apply to you and the asset.


Step 3.

Deduct the amount obtained in Step 2 from the amount obtained in Step 1. The result is the alternative assessable amount .

250-40(4)  
To avoid doubt, the amounts referred to in subsections (2) and (3) are all the amounts that would be likely to be included in your assessable income, or deducted, for all the income years during the whole, or a part, of which the asset is *put to the tax preferred use.

250-40(5)  
The point in time to be used in determining, for the purposes of this section:


(a) the present value of an amount that is included in your assessable income for an income year; or


(b) the present value of an amount that you would be able to deduct for an income year;

is the end of the income year.


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