CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-10
-
FINANCIAL TRANSACTIONS
History
Part 3-10 inserted by No 72 of 2001.
Division 250
-
Assets put to tax preferred use
History
Div 250 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007.
No 164 of 2007
, s 3 and Sch 1 item 71 contains the following application provision:
Application
(1)
Subject to subitems (4), (6) and (8), Division 250 applies in relation to a tax preferred use of an asset if, and only if, the tax preferred use:
(a)
starts on or after 1 July 2007; and
(b)
does not occur under a legally enforceable arrangement that was entered into before 1 July 2007.
(2)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
but for this subitem:
(i)
section
51AD
would apply to the asset in relation to a taxpayer; or
(ii)
Division
16D
would apply to the asset; and
(d)
you elect to have this subitem apply to the asset.
(3)
An election under paragraph (2)(d) in relation to an asset that is put to a tax preferred use:
(a)
must be made by the day you lodge your income tax return for the income year in which the tax preferred use starts; and
(b)
must be made for the whole of the arrangement period for the tax preferred use of the asset; and
(c)
must extend to all assets that are, or are to be, put to a tax preferred use under the arrangement under which the asset is put to that use; and
(d)
is irrevocable.
(4)
If subitem (2) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset.
(5)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(d)
the arrangement referred to in paragraph (b) is materially altered on or after 1 July 2007; and
(e)
but for this subitem and subitem (6):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
For the purposes of applying paragraph (c), assume that the asset was in existence and was being put to the tax preferred use immediately before 1 July 2007.
(6)
If subitem (5) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(7)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use started before 1 July 2007; and
(b)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(c)
the arrangement under which the tax preferred use of the asset occurs is materially altered on or after 1 July 2007; and
(d)
but for this subitem and subitem (8):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
(8)
If subitem (7) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(9)
For the purposes of applying subparagraphs (5)(c)(ii) and (e)(ii) and (7)(b)(ii) and (d)(ii), disregard the operation of section
159GL
of the
Income Tax Assessment Act 1936
.
(10)
For the purposes of applying Division 250 to the tax preferred use of an asset in accordance with subitem (6) or (8), the
arrangement period
for the tax preferred use of the asset is taken to start on the day on which the alteration referred to in paragraph (5)(d) or (7)(c) occurs.
(11)
Section
51AD
does not apply to an asset for the income year commencing on 1 July 2007, or a later income year, if:
(a)
the asset is put to a tax preferred use under a legally enforceable arrangement; and
(b)
the arrangement was entered into before 1 July 2007; and
(c)
the tax preferred use of the asset starts on or after 1 July 2003 and before 1 July 2007.
…
(13)
In this item:
arrangement
has the same meaning as in the
Income Tax Assessment Act 1997
.
asset
includes property (within the meaning of section
51AD
and Division
16D
).
Division 16D
means Division
16D
of Part
III
of the
Income Tax Assessment Act 1936
.
Division 250
means Division 250 of the
Income Tax Assessment Act 1997
.
section 51AD
means section
51AD
of the
Income Tax Assessment Act 1936
.
tax preferred use
has the same meaning as in the
Income Tax Assessment Act 1997
.
Subdivision 250-B
-
When this Division applies to you and an asset
History
Subdiv 250-B inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
Tax preferred use of asset
SECTION 250-75
What constitutes a separate asset for the purposes of this Division
250-75(1)
This Division applies to:
(a)
an improvement to land; or
(b)
a fixture on land;
whether the improvement or fixture is removable or not, as if it were an asset separate from the land.
250-75(2)
Whether a particular composite item is itself an asset or whether its components are separate assets is a question of fact and degree which can only be determined in the light of all the circumstances of the particular case.
EXAMPLES
Example 1:
A car is made up of many separate components, but usually the car is an asset rather than each component.
Example 2:
A floating restaurant consists of many separate components (like the ship itself, stoves, fridges, furniture, crockery and cutlery), but usually these components are treated as separate assets.
250-75(3)
This Division applies to a renewal or extension of an asset that is a right as if the renewal or extension were a continuation of the original right.
250-75(4)
This Division applies to an asset (the
underlying asset
) in which:
(a)
you have an interest; and
(b)
one or more other entities also have an interest;
as if your interest in the underlying asset were itself the underlying asset.
History
S 250-75 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
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