ATO ID 2012/36: Lease Document Expenses: deductibility when a property used partly for the production of assessable income
Date of decision: 1 May 2012
Year of income: Year ending 30 June 2012
Business line: Private Groups and High Wealth Individuals

Issue
In the context of subsection 25-20(2) of the Income Tax Assessment Act 1997 (ITAA 1997), does the phrase 'will use' refer to intention at the time the relevant outgoing is incurred?

Decision
No. In the context of subsection 25-20(2) of the ITAA 1997 the phrase 'will use' is a reference to actual use of the property.

Facts
The taxpayer acquired the leasehold of a residential property during the income year and incurred stamp duty on transfer. The property was tenanted for three months to a third party after which time the tenants vacated the premises and the taxpayer took up residence for the balance of the income year.

Reasons for decision

Legislative references: Income Tax Assessment Act 1997 section 25-20 subsection 25-20(1) subsection 25-20(2)
Case references: Rayfield v Hands [1958] 2 All ER 194
Related ATO interpretative decisions: ATO ID 2002/245
Subject references: Deductions & expenses Lease & hire expenses Other references The Macquarie Dictionary, 2005, 4th edition, The Macquarie Library Pty Ltd, NSW