CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-10
-
FINANCIAL TRANSACTIONS
History
Part 3-10 inserted by No 72 of 2001.
Division 250
-
Assets put to tax preferred use
History
Div 250 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007.
No 164 of 2007
, s 3 and Sch 1 item 71 contains the following application provision:
Application
(1)
Subject to subitems (4), (6) and (8), Division 250 applies in relation to a tax preferred use of an asset if, and only if, the tax preferred use:
(a)
starts on or after 1 July 2007; and
(b)
does not occur under a legally enforceable arrangement that was entered into before 1 July 2007.
(2)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
but for this subitem:
(i)
section
51AD
would apply to the asset in relation to a taxpayer; or
(ii)
Division
16D
would apply to the asset; and
(d)
you elect to have this subitem apply to the asset.
(3)
An election under paragraph (2)(d) in relation to an asset that is put to a tax preferred use:
(a)
must be made by the day you lodge your income tax return for the income year in which the tax preferred use starts; and
(b)
must be made for the whole of the arrangement period for the tax preferred use of the asset; and
(c)
must extend to all assets that are, or are to be, put to a tax preferred use under the arrangement under which the asset is put to that use; and
(d)
is irrevocable.
(4)
If subitem (2) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset.
(5)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use starts on or after 1 July 2007; and
(b)
the tax preferred use occurs under a legally enforceable arrangement that was entered into before 1 July 2007; and
(c)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(d)
the arrangement referred to in paragraph (b) is materially altered on or after 1 July 2007; and
(e)
but for this subitem and subitem (6):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
For the purposes of applying paragraph (c), assume that the asset was in existence and was being put to the tax preferred use immediately before 1 July 2007.
(6)
If subitem (5) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(7)
This subitem applies to an asset that is put to a tax preferred use if:
(a)
the tax preferred use started before 1 July 2007; and
(b)
immediately before 1 July 2007:
(i)
section
51AD
did not apply to the asset in relation to a taxpayer; and
(ii)
Division
16D
did not apply to the asset; and
(c)
the arrangement under which the tax preferred use of the asset occurs is materially altered on or after 1 July 2007; and
(d)
but for this subitem and subitem (8):
(i)
section
51AD
would apply to the asset in relation to a taxpayer immediately after the alteration; or
(ii)
Division
16D
would apply to the asset immediately after the alteration.
(8)
If subitem (7) applies:
(a)
section
51AD
and Division
16D
do not apply to the asset; and
(b)
Division 250 applies to the tax preferred use of the asset after the alteration instead.
(9)
For the purposes of applying subparagraphs (5)(c)(ii) and (e)(ii) and (7)(b)(ii) and (d)(ii), disregard the operation of section
159GL
of the
Income Tax Assessment Act 1936
.
(10)
For the purposes of applying Division 250 to the tax preferred use of an asset in accordance with subitem (6) or (8), the
arrangement period
for the tax preferred use of the asset is taken to start on the day on which the alteration referred to in paragraph (5)(d) or (7)(c) occurs.
(11)
Section
51AD
does not apply to an asset for the income year commencing on 1 July 2007, or a later income year, if:
(a)
the asset is put to a tax preferred use under a legally enforceable arrangement; and
(b)
the arrangement was entered into before 1 July 2007; and
(c)
the tax preferred use of the asset starts on or after 1 July 2003 and before 1 July 2007.
…
(13)
In this item:
arrangement
has the same meaning as in the
Income Tax Assessment Act 1997
.
asset
includes property (within the meaning of section
51AD
and Division
16D
).
Division 16D
means Division
16D
of Part
III
of the
Income Tax Assessment Act 1936
.
Division 250
means Division 250 of the
Income Tax Assessment Act 1997
.
section 51AD
means section
51AD
of the
Income Tax Assessment Act 1936
.
tax preferred use
has the same meaning as in the
Income Tax Assessment Act 1997
.
Subdivision 250-E
-
Taxation of deemed loan
History
Subdiv 250-E inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
Other provisions
SECTION 250-280
Financial arrangement received or provided as consideration
250-280(1)
If:
(a)
this Subdivision applies in relation to your gains and losses from the *financial arrangement; and
(b)
you start to have the financial arrangement (or a part of the financial arrangement) as consideration (or as part of the consideration) for:
(i)
something (the
thing provided
) that you provided, or are to provide, to someone else; or
(ii)
something (the
thing acquired
) that someone else has provided, or is to provide, to you; and
(c)
the thing provided or the thing acquired is not money;
the amount of the benefit (or that part of the benefit) that you obtained for the thing provided, or gave for the thing acquired, is taken, for the purposes of applying this Act to you, to be the *market value of the financial arrangement (or that part of the financial arrangement) at the time when you start to have the financial arrangement.
Note 1:
This amount may be relevant, for example, for the purposes of applying the provisions of this Act dealing with capital gains, capital allowances or trading stock to the thing provided or the thing acquired.
Note 2:
The market value is to be used instead of the nominal value of the financial benefits to be provided under the financial arrangement.
250-280(2)
If subsection (1) applies, you are taken to have received, or provided, as consideration for starting to have the *financial arrangement (or the part of the financial arrangement), *financial benefits whose value is equal to the market value of the financial arrangement (or that part of the financial arrangement) at the time when you started to have the financial arrangement.
250-280(3)
If, but for this subsection:
(a)
subsection (2) would apply to your starting to have a *financial arrangement; and
(b)
subsection (1) or (4) would also apply to your starting to have the financial arrangement;
subsection (2) applies to your starting to have the financial arrangement and subsection (1) or (4) does not.
250-280(4)
If:
(a)
this Subdivision applies in relation to your gains and losses from the *financial arrangement; and
(b)
you cease to have the financial arrangement (or a part of the financial arrangement) as consideration (or as part of the consideration) for:
(i)
something (the
thing acquired
) that someone else provides, or is to provide, to you; or
(ii)
something (the
thing provided
) that you provided, or are to provide, to someone else; and
(c)
the thing acquired or the thing provided is not money;
the amount of the benefit (or that part of the benefit) that you provided for the thing acquired, or obtained for the thing provided, is taken, for the purposes of applying this Act to you, to be the *market value of the financial arrangement (or that part of the financial arrangement) at the time when you cease to have the financial arrangement (or that part of the financial arrangement).
Note 1:
This amount may be relevant, for example, for the purposes of applying the provisions of this Act dealing with capital gains, capital allowances or trading stock to the thing acquired or the thing provided.
Note 2:
The market value is to be used instead of the nominal value of the financial benefits to be provided under the financial arrangement.
250-280(5)
If subsection (4) applies, you are taken to have provided, or received, as consideration for ceasing to have the *financial arrangement (or the part of the financial arrangement), *financial benefits whose value is equal to the market value of the financial arrangement (or that part of the financial arrangement) at the time when you ceased to have the financial arrangement.
250-280(6)
If, but for this subsection:
(a)
subsection (5) would apply to your ceasing to have a *financial arrangement; and
(b)
subsection (1) or (4) would also apply to your ceasing to have the financial arrangement;
subsection (5) applies to your ceasing to have the financial arrangement and subsection (1) or (4) does not.
250-280(7)
Without limiting subsections (1) and (4), the thing provided, or the thing acquired, need not be a tangible thing and may take the form of services, conferring a right, incurring an obligation or extinguishing or varying a right or obligation.
History
S 250-280 inserted by
No 164 of 2007
, s 3 and Sch 1 item 1, effective 25 September 2007. For application provision, see note under Div
250
heading.
View history note
Hide history note