Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 2/3)
Character Range: 331192–333800

of the lease payments paid or payable by the lessee, or have deducted or can deduct any of them for an earlier income year, under this Act; and
 (e) either:
 (i) you, your associate, or entities including you or your associate, acquired the car from the lessor; or
 (ii) another entity acquired the car from the lessor under an *arrangement that enabled you or your associate to acquire the car.
Note 1: Even if subsection (1) does not apply, an amount may be included in your assessable income if you disposed of an interest in a car (rather than the car itself): see section 20‑160.
Note 2: In some cases you do not include an amount in your assessable income:
                  *   if there has been an earlier disposal of the car for market value: see section 20‑135; or
                  *   if you inherited the car: see section 20‑145; or
                  *   if the car was let on hire in the circumstances set out in section 20‑155.
 (2) However, the amount included cannot exceed the smallest of these limits:
 (a) the total lease payments for the lease that you, your *associate or another entity have deducted or can deduct under this Act for an income year;
 (b) the amount of *notional depreciation for the lease period;
 (c) if an entity other than you, or if entities including you, acquired the *car from the lessor—the amount by which the *consideration receivable for the disposal of the car by you exceeds the total of:
 (i) the car's cost to that entity, or those entities; and
 (ii) any capital expenditure that entity, or any of those entities, incurred on the car after that acquisition and before you acquired it.
Note 1: If, because of more than one lease of the car, there is more than one way to work out the amount to be included, you only include the largest amount: see section 20‑130.
Note 2: In some cases you reduce the amount to be included:
                  *   if there has been an earlier disposal of the car, or of an interest in it: see section 20‑140; or
                  *   if another provision requires you to include an amount because of the disposal: see section 20‑150.
Example: Your associate leases a car for 5 years and then acquires it from the lessor for $4,000. Your associate sells it to you for $3,000. You sell it for $10,000.
 Your profit is $10,000 (the consideration receivable) less $3,000 (the car's cost to you) = $7,000.
 The first 2 limits on the amount to be included in your assessable income are $9,000 (total deductible lease payments for the lease) and $8,000 (notional depreciation for the lease period).
 Since your associate acquired