INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART XII - DROUGHT INVESTMENT ALLOWANCE  

Division 3 - Leasing company deduction  

Subdivision A - Entitlement to deduction  

SECTION 636   EXPENDITURE QUALIFYING FOR THE DEDUCTION  

636(1)   Capital expenditure of at least $3,000 on new drought mitigation property.  

A taxpayer is entitled to the deduction under this Part if the taxpayer is a leasing company that incurs expenditure of a capital nature of at least $3,000 in acquiring or constructing a new item of drought mitigation property, and the conditions in this section are met.

Note:

Other provisions of this Part may remove the entitlement.

636(2)   Use for producing assessable primary production income.  

The item must be for use wholly and exclusively in Australia, for the purpose of producing assessable primary production income, by another person.

636(3)   Lease for at least 4 years.  

The taxpayer must have leased the item to the other person for 4 years or more under a lease that:

(a) was entered into by the taxpayer in the course of carrying on business in Australia; and

(b) was entered into by the taxpayer and the other person at arm's length.

636(4)   Time limit for incurring the expenditure.  

If the expenditure is incurred in acquiring the item, it must be incurred after 23 March 1995 and before 1 July 2000. If the expenditure is incurred in constructing the item, the construction must begin after 23 March 1995 and before 1 July 2000.

636(5)   Time limit for first use.  

The item must be first used or installed ready for use by the other person before 1 July 2001.