INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 242 - Leases of luxury cars  

Subdivision 242-D - Adjustments if total amount assessed to lessor differs from amount of interest  

Guide to Subdivision 242-D

SECTION 242-60   What this Subdivision is about  


When a luxury car lease is extended, renewed or ends, the overall nominal gain to the lessor is compared to the nominal interest so far paid under the lease.

If the overall nominal gain is greater, the difference is assessable income of the lessor, and the lessee may be able to deduct it.

If the overall nominal gain is less, the lessor can deduct the difference, which may also be assessable income of the lessee.

This process ensures that the right amount has been taxed over the term of the lease.


TABLE OF SECTIONS
TABLE OF SECTIONS
Operative provisions
242-65 Adjustments for lessor
242-70 Adjustments for lessee


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