INCOME TAX ASSESSMENT ACT 1997 - SECT 20.140 Reducing the amount to be included if there has been an earlier disposal

INCOME TAX ASSESSMENT ACT 1997 - SECT 20.140

    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:

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 .