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This edited version has been archived due to the length of time since original publication.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: 1012606613987

Ruling

Subject: Division 250 of the Income Tax Assessment Act 1997

The ruling concerned the following:

    1. Will the 'assets' of the entity be put to a tax preferred use under section 250-60 of the Income Tax Assessment Act 1997 (ITAA 1997) if none of the following entities are tax preferred entities:

    • the entity

    • the lessee entity, and

    • any other entity that is a 'connected entity' of the aforementioned entities as defined in subsection 995-1(1) of the ITAA 1997?

    2. If the answer to question 1 is affirmative, or if the entity, or any of its connected entities, are a tax preferred entity and the 'assets' are put to a tax preferred use, is paragraph 250-15(c) of the ITAA 1997 satisfied when lease payments are received by the entity?

    3. Will the entity lack a 'predominant economic interest' in the 'assets' as a result of the application of paragraph 250-135(2)(b) of the ITAA 1997 if the entity, its connected entities and all entities that provide financial benefits in relation to the tax preferred use of the assets are members of the tax preferred sector?

The Commissioner ruled that:

    1. No. The 'assets' of the entity will not be put to a tax preferred use under section 250-60 of the ITAA 1997 if none of the following entities are tax preferred entities:

    • the entity

    • the lessee entity, and

    • any other entity that is a 'connected entity' of the aforementioned entities as defined in subsection 995-1(1) of the ITAA 1997.

    2. Yes. If the entity, or any of its connected entities, are a tax preferred entity and the 'assets' are put to a tax preferred use, paragraph 250-15(c) of the ITAA 1997 is satisfied when lease payments are received by the entity.

    3. No. The entity will not lack a 'predominant economic interest' in the 'assets' as a result of the application of paragraph 250-135(2)(b) of the ITAA 1997 if the entity, its connected entities and all entities that provide financial benefits in relation to the tax preferred use of the 'assets' are members of the tax preferred sector.


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