Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 242.75

What this Subdivision is about

When a luxury car lease ends (whether it expires or is terminated before its expiry date), one of 3 things will happen:

  (a)   if the lease is extended or renewed--the original notional loan is treated as having been repaid and the lessor is treated as having made a new loan to the lessee; or

  (b)   if the lessee acquires the car from the lessor--the lessee continues to own the car for tax purposes, and the actual transfer and the termination payment to acquire the car are ignored for tax purposes; or

  (c)   if the lessee's right to use the car ends--the lessee is treated as having sold the car back to the lessor.

In each case, there may be adjustments under Subdivision   242 - D to ensure that the right amount has been taxed over the term of the lease.

Table of sections

Operative provisions

242 - 80   What happens if the term of the lease is extended or the lease is renewed

242 - 85   What happens if an amount is paid by the lessee to acquire the car

242 - 90   What happens if the lessee stops having the right to use the car



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