Commonwealth Consolidated Acts Commonwealth Consolidated ActsWhen a luxury car lease ends (whether it expires or is terminated before its expiry date), one of 3 things will happen:
(a) if the lease is extended or renewed--the original notional loan is treated as having been repaid and the lessor is treated as having made a new loan to the lessee; or
(b) if the lessee acquires the car from the lessor--the lessee continues to own the car for tax purposes, and the actual transfer and the termination payment to acquire the car are ignored for tax purposes; or
(c) if the lessee's right to use the car ends--the lessee is treated as having sold the car back to the lessor.
In each case, there may be adjustments under Subdivision 242 - D to ensure that the right amount has been taxed over the term of the lease.
Table of sections
Operative provisions
242 - 80 What happens if the term of the lease is extended or the lease is renewed
242 - 85 What happens if an amount is paid by the lessee to acquire the car
242 - 90 What happens if the lessee stops having the right to use the car