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INCOME TAX ASSESSMENT ACT 1997 - SECT 250.5 Main objects

INCOME TAX ASSESSMENT ACT 1997 - SECT 250.5

Main objects

    The main objects of this Division are:

  (a)   to deny or reduce your * capital allowance deductions in respect of an asset if the asset is put to a * tax preferred use and you have insufficient economic interest in the asset; and

  (b)   if your capital allowance deductions are denied or reduced, to treat the * arrangement for the tax preferred use of the asset as a loan that is taxed as a financial arrangement (on a compounding accruals basis).

Table of sections

Overall test

250 - 10   When this Division applies to you and an asset

250 - 15   General test

250 - 20   First exclusion--small business entities

250 - 25   Second exclusion--financial benefits under minimum value limit

250 - 30   Third exclusion--certain short term or low value arrangements

250 - 35   Exceptions to section   250 - 30

250 - 40   Fourth exclusion--sum of present values of financial benefits less that amount otherwise assessable

250 - 45   Fifth exclusion--Commissioner determination

Tax preferred use of asset

250 - 50   End user of an asset

250 - 55   Tax preferred end user

250 - 60   Tax preferred use of an asset

250 - 65   Arrangement period for tax preferred use

250 - 70   New tax preferred use at end of arrangement period if tax preferred use continues

250 - 75   What constitutes a separate asset for the purposes of this Division

250 - 80   Treatment of particular arrangements in the same way as leases

Financial benefits in relation to tax preferred use

250 - 85   Financial benefits in relation to tax preferred use of an asset

250 - 90   Financial benefit provided directly or indirectly

250 - 95   Expected financial benefits in relation to an asset put to tax preferred use

250 - 100   Present value of financial benefit that has already been provided

Discount rate to be used in working out present values

250 - 105   Discount rate to be used in working out present values

Predominant economic interest

250 - 110   Predominant economic interest

250 - 115   Limited recourse debt test

250 - 120   Right to acquire asset test

250 - 125   Effectively non - cancellable, long term arrangement test

250 - 130   Meaning of effectively non - cancellable arrangement

250 - 135   Level of expected financial benefits test

250 - 140   When to retest predominant economic interest under section   250 - 135

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