Commonwealth Consolidated Acts Commonwealth Consolidated ActsPart 1 -- Amendment of the Income Tax (Transitional Provisions) Act 1997
1 After Division 15
Insert:
Division 20 -- Items included to reverse the effect of past deductions
Subdivision 20-B -- Disposal of a car for which lease payments have been deducted
Table of sections
20-100 Application of Subdivision 20-B of the Income Tax Assessment Act 1997
20-105 The cost of a car acquired in the 1996-97 income year or an earlier income year
20-110 The termination value of a car disposed of in the 1996-97 income year or an earlier income year
20-115 Reducing the assessable amount for the disposal of a car in the 1997-98 income year or later if there has been an earlier disposal of it
20-100 Application of Subdivision 20-B of the Income Tax Assessment Act 1997
Subdivision 20-B of the Income Tax Assessment Act 1997 applies to assessments for the 1997 - 98 income year and later income years.
20-105 The cost of a car acquired in the 1996-97 income year or an earlier income year
(1) If:
(a) in the 1997-98 income year or a later income year you dispose of a car that was leased to you or your associate; and
(b) the lessor acquired the car in the 1996-97 income year or an earlier income year;
the cost of the car to the lessor for the purposes of section 20-120 of the Income Tax Assessment Act 1997 is worked out under the depreciation provisions of the Income Tax Assessment Act 1936 .
Note 1: Section 20-120 of the Income Tax Assessment Act 1997 is about a limit on the amount to be included in your assessable income because of your disposal of the car.
Note 2: The depreciation provisions are in Subdivision A of Division 3 of Part III of the Income Tax Assessment Act 1936 .
(2) In working out the cost of the car to the lessor, disregard any election the lessor made under subsection 59(2A) or (2D) of the Income Tax Assessment Act 1936 to reduce the cost of the car.
If:
(a) in the 1997-98 income year or a later income year you dispose of a car that was leased to you or your associate; and
(b) the lessor disposed of the car in the 1996-97 income year or an earlier income year;
the car's termination value (in respect of the disposal by the lessor) for the purposes of section 20-120 of the Income Tax Assessment Act 1997 is the consideration receivable by the lessor for the disposal (worked out under section 59 of the Income Tax Assessment Act 1936 ).
Note: Section 20-120 of the Income Tax Assessment Act 1997 is about a limit on the amount to be included in your assessable income because of your disposal of the car.
If:
(a) section 20-110 or 20- 125 of the Income Tax Assessment Act 1997 includes an amount in your assessable income for the 1997-98 income year or a later income year because of your disposal of a car; and
(b) in the 1996-97 income year or an earlier income year (but after the lease period began) there was an earlier disposal of the car, or an interest in it, by you or another entity in a situation described in the following table;
each limit on the amount to be included in your assessable income is reduced as follows:
Reducing each limit on the amount to be included | ||
Item | In this situation: | reduce each limit by: |
1 | Section 26AAB of the Income Tax Assessment Act 1936 included an amount in your assessable income in respect of such an earlier disposal by you | that amount |
2 | Section 26AAB of the Income Tax Assessment Act 1936 included an amount in another entity's assessable income in respect of such an earlier disposal by the other entity | that amount |
3 | Section 26AAB of the Income Tax Assessment Act 1936 would have included an amount in your assessable income in respect of such an earlier disposal by you but for the operation of subsection 26AAB(12) of that Act | that amount |
4 | Section 26AAB of the Income Tax Assessment Act 1936 would have included an amount in another entity's assessable income in respect of such an earlier disposal by the other entity but for the operation of subsection 26AAB(12) of that Act | that amount |
5 | Subsection 26AAB(9) of the Income Tax Assessment Act 1936 reduced the amount to be included in your assessable income in respect of such an earlier disposal by you | the amount of the reduction |
6 | Subsection 26AAB(9) of the Income Tax Assessment Act 1936 reduced the amount to be included in another entity's assessable income in respect of such an earlier disposal by the other entity | the amount of the reduction |
Part 2 -- Consequential amendment of the Income Tax Assessment Act 1997
2 Section 10-5 (table item headed "leases")
Omit " 26AAB ", substitute "Subdivision 20-B".
3 Subsection 995- 1(1)
Insert:
"notional depreciation" for a lease period has the meaning given by section 20-120.
4 Subsection 995- 1(1)
Insert:
"profit" on the disposal of a leased * car has the meaning given by section 20-115.
Part 3 -- Consequential amendment of the Income Tax Assessment Act 1936
5 Paragraph 26AAB(1)(d)
Omit "at any later time", substitute "before the 1997-98 year of income".
6 At the end of subsection 26AAB(1)
Add:
Note: Subdivision 20-B of the Income Tax Assessment Act 1997 applies to the disposal of a car, or of an interest in a car, by a relevant taxpayer in the 1997-98 year of income or a later year of income.
7 Before paragraph 170(10AA)(a)
Insert:
(aa) Subdivision 20-B;