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Edited version of your private ruling
Authorisation Number: 1012546200731
Ruling
Subject : Division 250 and assets
Question
Does Division 250 of the ITAA 1997 apply to the assets?
Answer:
No
This ruling applies for the following period
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
The scheme commenced on
1 July 2012
Relevant facts
A number of entities undertook a project together.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 250-15
Income Tax Assessment Act 1997 Subsection 250-15(a)
Income Tax Assessment Act 1997 Subsection 250-60(2)
Income Tax Assessment Act 1997 Section 250-50(1)
Income Tax Assessment Act 1997 Section 250-50(1)
Income Tax Assessment Act 1936 Subsection 51AD(1)
Reasons for decision
Division 250 sets out the general test in 250-15:
250-15 General test
This Division applies to you and an asset at a particular time if:
(a) the asset is being put to a tax preferred use; and
(b) the arrangement period for the tax preferred use of the asset is greater than 12 months; and
(c) financial benefits in relation to the tax preferred use of the asset have been, will be or can reasonably be expected to be, provided to you (or a connected entity) by:
(i) a tax preferred end user (or a connected entity); or
(ii) any tax preferred entity (or a connected entity); or
(iii) any entity that is a foreign resident; and
(d) disregarding this Division, you would be entitled to a capital allowance in relation to:
(i) a decline in the value of the asset; or
(ii) expenditure in relation to the asset; and
(e) you lack a predominant economic interest in the asset at that time.
The issue is whether the asset is being put to a tax preferred use for 250-15(a).
The arrangement will not involve an asset being put to a tax preferred use at a particular time for the purposes of subsections 250-60(2) and 250-15(a). Division 250 will consequently not apply.
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