INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 242 - Leases of luxury cars  

Subdivision 242-B - Amount to be included in lessor ' s assessable income  

Operative provisions

SECTION 242-35   Amount to be included in lessor ' s assessable income  

Accrual amounts

242-35(1)  
The lessor ' s assessable income for an income year includes:


(a) if a *luxury car lease payment period for the lease of a *car occurs wholly during that income year - the amount (an accrual amount ) worked out under subsection (2) for that luxury car lease payment period; and


(b) if part of a luxury car lease payment period for the lease of a car occurs during that income year - so much of the amount (also an accrual amount ) worked out under subsection (2) for that luxury car lease payment period as may appropriately be related to that income year in accordance with generally accepted accounting principles.

242-35(2)  
The amount is:


Outstanding notional loan principal
at the start of the lease payment period
× Implicit interest rate

where:

implicit interest rate
is the implicit interest rate under the lease for the *luxury car lease payment period, taking into account the payments to be made by the lessee under the lease and any *termination amounts.

outstanding notional loan principal at the start of the lease payment period
is:


(a) the sum of the notional loan principal and the accrual amounts for earlier *luxury car lease payment periods; less


(b) the sum of the *luxury car lease payments that the lessee was required to make before the start of the relevant luxury car lease payment period.

Excessive periods

242-35(3)  
If, apart from this subsection, a *luxury car lease payment period for the lease of a *car would exceed 6 months, this Division applies as if each of the following were a separate luxury car lease payment period:


(a) the first 6 months of the original luxury car lease payment period;


(b) if the original luxury car lease payment period was not longer than 12 months - the remaining part of the original luxury car lease payment period;


(c) if the original luxury car lease payment period was longer than 12 months - each successive 6 month period in the original luxury car lease payment period;


(d) the period (if any) after the end of the last of the periods to which paragraph (c) applies.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.