Document ID: chunk:federal_register_of_legislation:C2011C00610:clause:3_2:p3
Version: federal_register_of_legislation:C2011C00610
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 3/9)
Character Range: 139334–142024

for the purposes of applying this Act to the lessor if the lessor were not taken under this Division to have disposed of the car; and
 (d) any amount that is included in the lessor's assessable income under section 40‑285 as a balancing adjustment because the lessor is treated as having disposed of the car.

Note: Section 242‑20 of the Income Tax (Transitional Provisions) Act 1997 extends paragraph (2)(d) to cover amounts included in assessable income under former provisions corresponding to section 40‑285.

242‑25  Notional loan by lessor to lessee

 (1) This Act has effect as if, on the grant of the lease, the lessor had made a loan (the notional loan) to the lessee:
 (a) for a period equal to the term of the lease (not including the term of any extension or renewal); and
 (b) of an amount (the notional loan principal) equal to the consideration for the notional sale of the *car less any amount paid, or credited by the lessor as having been paid, by the lessee to the lessor, at or before the start of the term of the lease, for the first element of the *cost of the car to the lessee; and
 (c) subject to payment of interest.

Note: There is a further notional loan if the lease is extended or renewed: see section 242‑80.

 (2) This Act has effect as if the notional loan principal were repaid, and the interest were paid, by the making of the *luxury car lease payments.

Subdivision 242‑B—Amount to be included in lessor's assessable income

Guide to Subdivision 242‑B

242‑30  What this Subdivision is about

      The lessor's assessable income includes the interest on the notional loan.
      The lease payments to the lessor are non‑assessable non‑exempt income.
                  Note: If the consideration for a notional sale of a car exceeds the adjustable value of the car to the lessor, the excess will be included in the lessor's assessable income under section 40‑285.
                   There would be a similar result if the lessor is treated as having reacquired the car and then sells the car for more than the cost of reacquisition.

Table of sections

Operative provisions

242‑35 Amount to be included in lessor's assessable income
242‑40 Treatment of lease payments

Operative provisions

242‑35  Amount to be included in lessor's assessable income

Accrual amounts

 (1) The lessor's assessable income for an income year includes:
 (a) if a *luxury car lease payment period for the lease of a *car occurs wholly during that income year—the amount (an accrual amount) worked out under subsection (2) for that luxury car lease payment period; and
 (b) if part of a luxury car lease payment period for the lease of a car occurs during that income