INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-F - Leases  

SECTION 104-110   Granting a lease: CGT event F1  

104-110(1)  
CGT event F1 happens if a lessor grants, renews or extends a lease.

Note 1:

Other CGT events can apply to leases. An assignment of a lease is an example of CGT event A1.

Note 2:

There are special rules that apply to some lease transactions: see Division 132 .

104-110(2)  
The time of the event is:


(a) for the grant of a lease:


(i) when the contract for the lease is entered into; or

(ii) if there is no contract - at the start of the lease; or


(b) for a renewal or extension - at the start of the renewal or extension.

104-110(3)  


The lessor makes a capital gain if the *capital proceeds from the grant, renewal or extension are more than the expenditure it incurred on the grant, renewal or extension. It makes a capital loss if those capital proceeds are less .

104-110(4)  
The expenditure can include giving property: see section 103-5 . However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it. Exception

104-110(5)  
The lessor can choose to apply section 104-115 to certain long term leases. If it does so, this section does not apply.


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