Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 104.130

Lessor receives payment for changing lease: CGT event F5

             (1)  CGT event F5 happens if a lessor receives a payment from the lessee for agreeing to vary or waive a term of the lease.

                   The payment can include giving property: see section 103-5.

             (2)  The time of the event is when the term is varied or waived.

             (3)  The lessor makes a capital gain if the * capital proceeds from the event are more than the expenditure the lessor incurs in relation to the variation or waiver. The lessor makes a capital loss if those capital proceeds are less .

Example:    You own a shopping centre. The lessee of a shop in the centre pays you $10,000 for agreeing to change the terms of its lease. You incur expenses of $1,000 for a solicitor and $500 for a valuer. You make a capital gain of $8,500.

             (4)  The expenditure can include giving property: see section 103-5. However, it does not include an amount you have received as * recoupment of it and that is not included in your assessable income.

Exceptions

             (5)  A * capital gain or * capital loss the lessor makes is disregarded if:

                     (a)  the lease was granted before 20 September 1985; or

                     (b)  for a lease that has been renewed or extended--the start of the last renewal or extension occurred before that day.

Table of sections

104-135    Capital payment for shares: CGT event G1

104-145    Liquidator or administrator declares shares or financial instruments worthless: CGT event G3



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