Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 242 - Leases of luxury cars  

Subdivision 242-E - Extension, renewal and final ending of the lease  

Operative provisions

SECTION 242-90   What happens if the lessee stops having the right to use the car  

242-90(1)  
If, at the end time:


(a) the lessee stops having the *right to use the *car; and


(b) no amount is paid to the lessor by, or on behalf of, the lessee to acquire the car;

the following provisions have effect.

Note:

For end time , see section 242-85 .

242-90(2)  
This Act has effect as if the *car:


(a) were sold by the lessee to the lessor; and


(b) were acquired by the lessor;

at the end time.

242-90(3)  
The consideration for the sale of the *car by the lessee, and the first element of the *cost of the car to the lessor, are the *market value of the car at the end time.

242-90(4)  
If the *car is afterwards acquired by an *associate of the lessee or an employer or employee of the lessee, this Act has effect as if the first element of the *cost of the car as a *depreciating asset were the lesser of:


(a) the sum of:


(i) the amount that would have been the *adjustable value of the car at that time for the purposes of applying this Act to the lessee if the lessee were not treated under this Division as having disposed of the car; and

(ii) any amount that is included in the lessee ' s assessable income under section 40-285 as a balancing adjustment because the lessee is treated as having disposed of the car; and


(b) the cost of the acquisition of the car by the associate, employer or employee.

Note:

Section 242-20 of the Income Tax (Transitional Provisions) Act 1997 extends subparagraph (a)(ii) to cover amounts included in assessable income under former provisions corresponding to section 40-285 .

242-90(5)  
For the purposes of paragraph (1)(a), the lessee is not treated as having stopped to have the *right to use the *car if:


(a) the term of the lease is extended (or further extended), or the lease is renewed (or further renewed), at a time after, but not immediately after, the end of that term, extension or renewal with effect from the time immediately after that end; or


(b) the extension or renewal (or further extension or renewal) otherwise results in substantial continuity of the leasing of the car to the lessee.


 

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