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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

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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