INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 250 - Assets put to tax preferred use  

Subdivision 250-C - Denial of, or reduction in, capital allowance deductions  

SECTION 250-150   Apportionment rule  

250-150(1)  
This section applies if:


(a) this Division applies to you and an asset that is *put to a tax preferred use; and


(b) it is reasonable to expect that, during the *arrangement period for the *tax preferred use of the asset, particular *financial benefits will be provided to you (or a *connected entity); and


(c) it is reasonable to expect that those financial benefits:


(i) will be provided in relation to a use of the asset that is not that tax preferred use and is not a private use; or

(ii) will be *provided in relation to that tax preferred use of the asset but will not be attributable, directly or indirectly, to financial benefits that are provided by *members of the tax preferred sector; and


(d) the amount or value of those financial benefits is known or can reasonably be estimated; and


(e) you choose to have this section apply to the asset.

In applying paragraph (c), disregard financial benefits that are provided under an *arrangement that is a *debt interest.

250-150(2)  
A choice under paragraph (1)(e) in relation to an asset:


(a) must be made before the due date for you to lodge your *income tax return for the income year in which the *arrangement period for the *tax preferred use of the asset 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.

The choice may extend to an asset referred to in paragraph (c) even if it is likely that paragraphs (1)(b) and (c) will not apply to that asset.

250-150(3)  
If this section applies, section 250-145 applies to you and the asset only to the extent of the *disallowed capital allowance percentage.

250-150(4)  
Subject to subsection (6), the disallowed capital allowance percentage is the following ratio (expressed as a percentage):


Sum of present values of financial benefits
that are subject to deemed loan treatment
Market value of asset

250-150(5)  
The Commissioner may, before the due date for you to lodge your *income tax return for the income year to which the *arrangement period for the *tax preferred use of the asset starts, approve an alternative method for working out the *disallowed capital allowance percentage for you and the asset.

250-150(6)  
If the Commissioner approves an alternative method under subsection (5), the disallowed capital allowance percentage is the percentage worked out in accordance with that alternative method.


 

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