A T O home
Legal Database
Search   
for 
 
Access the database 
Browse database
Searches  
View last document
Quick access 
View legislation
View a document
Email Cross Reference Material Previous/Next Section Contents Previous/Next Result
Printable version
Printable
version

INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-1 - ASSESSABLE INCOME    View history reference

Division 20 - Amounts included to reverse the effect of past deductions    View history reference

Subdivision 20-B - Disposal of a car for which lease payments have been deducted    View history reference

Previous disposals of the car

SECTION 20-140  

20-140  Reducing the amount to be included if there has been an earlier disposal  

 View history reference ITAA 36
Each limit on the amount to be included in your assessable income because of your disposal of the *car is reduced if, after the lease period began and before your disposal, the car, or an interest in it, was disposed of in one of these situations:
Reducing each limit on the amount to be included
ItemIn this situation:reduce each limit by:
1Section 20-110 or 20-125 included an amount in your assessable income in respect of such an earlier disposal by youthat amount
...........
2Section 20-110 or 20-125 included an amount in another entity's assessable income in respect of such an earlier disposal by the other entitythat amount
...........
3Section 20-110 or 20-125 would have included an amount in your assessable income in respect of such an earlier disposal by you but for the operation of section 20-145that amount
...........
4Section 20-110 or 20-125 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 section 20-145that amount
...........
5Section 20-150 reduced the amount to be included in your assessable income in respect of such an earlier disposal by youthe amount of the reduction
...........
6Section 20-150 reduced the amount to be included in another entity's assessable income in respect of such an earlier disposal by the other entitythe amount of the reduction

Examples:

Your associate leases a car for 5 years and then acquires it. Your associate disposes of it to you and section 20-110 includes $500 in your associate's assessable income.

You later dispose of the car.

In working out the amount to include in your assessable income for your disposal, you can reduce each limit in subsection 20-125(2) by $500 because the disposal by your associate occurred after the lease period began.

Contrast this case:

You lease a car for 5 years and then acquire it. You dispose of it to another entity and section 20-110 includes $1,000 in your assessable income.

You lease the car from that entity for 2 years and then acquire it. You later dispose of it.

In working out the amount to include in your assessable income in respect of the second lease, you cannot reduce each limit in subsection 20-110(2) by $1,000 because the first disposal did not occur after the start of that lease.

Note:

If the earlier disposal occurred in the 1996-97 income year or an earlier income year, each limit may be able to be reduced by a further amount: see section 20-115 of the Income Tax (Transitional Provisions) Act 1997.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
Top of page
More information on page