Tax Law Improvement Act (No. 1) 1998 (46 of 1998)
Schedule 1 Amendment of the Income Tax Assessment Act 1997
1 Part 3-3 Division 132
Division 132 - Leases
Table of sections
132-1 Lessee incurs expenditure to get lease term varied or waived
132-5 Lessor pays lessee for improvements
132-10 Grant of a long-term lease
132-15 Lessee of land acquires reversionary interest of lessor
132-1 Lessee incurs expenditure to get lease term varied or waived
If the lessee of property incurs expenditure in obtaining the consent of the lessor to vary or waive a term of the lease, the fourth element of the lease's *cost base and *reduced cost base includes the amount of that expenditure.
The expenditure can include giving property: see section 103-5.
132-5 Lessor pays lessee for improvements
The fourth element of the *cost base and *reduced cost base of property that was subject to a lease includes any payment (because of the lease expiring or being surrendered or forfeited) by the lessor to the lessee for expenditure of a capital nature incurred by the lessee in making improvements to the lease property.
The payment or expenditure can include giving property: see section 103-5.
132-10 Grant of a long-term lease
(1) These rules apply if *CGT event F2 happens for a lessor of property.
(2) For any later *CGT event that happens to the land or the lessor's lease of it, its *cost base and *reduced cost base (including the cost base and reduced cost base of any building, part of a building, structure or improvement that is treated as a separate *CGT asset) excludes:
(a) any expenditure incurred before *CGT event F2 happens; and
(b) the *cost of any *plant for which the lessor has deducted or can deduct for depreciation under this Act.
Note: Subdivision 108-D sets out when a building, structure or improvement is treated as a separate CGT asset.
(3) The fourth element of the property's *cost base and *reduced cost base includes any payment by the lessor to the lessee to vary or waive a term of the lease or for the forfeiture or surrender of the lease.
(4) The expenditure or payment can include giving property: see section 103-5.
132-15 Lessee of land acquires reversionary interest of lessor
(1) This table sets out what happens if:
(a) the lessee of land *acquires the reversionary interest of the lessor in the land; and
(b) Subdivision 124-J (roll-over provisions for Crown leases) does not apply to the acquisition.
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Lessee acquires reversionary interest of lessor |
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The lessee is taken to have * acquired the land at this time: |
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1 |
The lease was originally granted for 99 years or more |
When the lease was granted or assigned to the lessee |
Any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to *acquire the reversionary interest |
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2 |
The lease was originally granted for less than 99 years |
When the lessee *acquired the reversionary interest |
(a) if the lessee *acquired the lease after 19 September 1985 - any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to acquire the reversionary interest; or (b) if the lessee acquired the lease before 20 September 1985 - the market value of the land when the lessee acquired it |
(2) All the payments can include giving property: see section 103-5.
Note: CGT events F1 to F5 deal specifically with leases. See also (in particular) CGT event C2 (about cancellation, surrender and similar endings).