Private ruling: Division 250 and assets
Published: November 2013
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2012

Ruling: Q1: Does Division 250 of the ITAA 1997 apply to the assets? | A1: No


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 250-15 | Income Tax Assessment Act 1997 Subsection 250-15(a) | Income Tax Assessment Act 1997 Subsection 250-60(2) | Income Tax Assessment Act 1997 Section 250-50(1) | Income Tax Assessment Act 1997 Section 250-50(1) | Income Tax Assessment Act 1936 Subsection 51AD(1)

Reasons for decision: Summary: Division 250 sets out the general test in 250-15: | Detailed Reasoning - 250-15 General test: This Division applies to you and an asset at a particular time if: (a) the asset is being put to a tax preferred use; and (b) the arrangement period for the tax preferred use of the asset is greater than 12 months; and (c) financial benefits in relation to the tax preferred use of the asset have been, will be or can reasonably be expected to be, provided to you (or a connected entity) by: (i) a tax preferred end user (or a connected entity); or (ii) any tax preferred entity (or a connected entity); or (iii) any entity that is a foreign resident; and (d) disregarding this Division, you would be entitled to a capital allowance in relation to: (i) a decline in the value of the asset; or (ii) expenditure in relation to the asset; and (e) you lack a predominant economic interest in the asset at that time. The issue is whether the asset is being put to a tax preferred use for 250-15(a). The arrangement will not involve an asset being put to a tax preferred use at a particular time for the purposes of subsections 250-60(2) and 250-15(a). Division 250 will consequently not apply.

Relevant facts: A number of entities undertook a project together.