INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)
(a) he is the lessee of the land, premises or machinery; or
(b) in the case of a premium paid for the surrender of the lease, he would have been the lessee had the lease been transferred to him and he had not been entitled to the reversion,
a proportionate part of the amount of that premium, arrived at by distributing that amount proportionately over the period of the lease unexpired at the date when the premium was paid, shall be an allowable deduction.88(2) [Improvements under terms of the lease]
Where a taxpayer, who in the year of income is a lessee of land used for the purpose of producing assessable income has, either before or after the commencement of the lease, incurred expenditure in making improvements not subject to tenant rights on that land, and such improvements -
(a) have, under an agreement entered into after the commencement of this Act, been made as consideration for the grant to him of that lease;
(b) are improvements which he was required to make under the provisions of that lease; or
(c) have been made with the written consent of the lessor given after the commencement of this Act,
a proportionate part of the amount of that expenditure arrived at by distributing that amount proportionately over the period of the lease unexpired at the date when the expenditure was incurred, shall be an allowable deduction. In calculating the deduction under this subsection, expenditure in excess of the amount, if any, specified in the agreement for the lease, or in the lease, or in the lessor's consent, shall not be taken into account.88(3) [Lessor or lessee controlling operations of other]
(a) where the lease is a lease of land to a company from an individual or from a company to an individual, and the individual directly or indirectly controls the voting power of the company; or
(b) (Omitted by No 88 of 1936)
(c) where the Commissioner is of the opinion that, in consequence of the terms and conditions of the lease or of any other circumstances, the lessor is in substantial control of the operations of the lessee or the lessee is in substantial control of the operations of the lessor.
Where any taxpayer succeeds to any lease or share therein upon the death of any person who has paid such premium or expended such money, he shall be entitled to the same deduction, or part thereof proportionate to his share in the lease, as that person would have been entitled to under this section had he lived.88(5) [Lease of indefinite duration]
(a) a premium paid in respect of land or machinery which is, or premises which are, the subject of a lease of indefinite duration; or
(b) expenditure incurred in making improvements upon land which is the subject of such a lease,
the taxpayer who paid the premium or incurred the expenditure, as the case may be, may elect that the period of the lease unexpired at the date when the premium was paid or when the expenditure was incurred shall be deemed to be 2 years, and where such an election has been made, the provisions of this section shall be applied accordingly.
An election under subsection (5) must be made on or before the date of lodgment of the return of income of the year of income in which the premium is paid or the expenditure is incurred, or within such further time as the Commissioner allows.
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