Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 11/30)
Character Range: 4189549–4192433

only to the extent of a notional gain component. This component is worked out on the basis of treating the arrangements under which the asset is put to a tax preferred use, and financial benefits are provided in relation to that tax preferred use, as a loan. Subdivision 250‑E then applies to determine the amounts that are to be assessed.

Subdivision 250‑A—Objects

Table of sections
250‑5 Main objects

250‑5  Main objects
  The main objects of this Division are:
 (a) to deny or reduce your *capital allowance deductions in respect of an asset if the asset is put to a *tax preferred use and you have insufficient economic interest in the asset; and
 (b) if your capital allowance deductions are denied or reduced, to treat the *arrangement for the tax preferred use of the asset as a loan that is taxed as a financial arrangement (on a compounding accruals basis).

Subdivision 250‑B—When this Division applies to you and an asset

Table of sections

Overall test
250‑10 When this Division applies to you and an asset
250‑15 General test
250‑20 First exclusion—small business entities
250‑25 Second exclusion—financial benefits under minimum value limit
250‑30 Third exclusion—certain short term or low value arrangements
250‑35 Exceptions to section 250‑30
250‑40 Fourth exclusion—sum of present values of financial benefits less that amount otherwise assessable
250‑45 Fifth exclusion—Commissioner determination

Tax preferred use of asset
250‑50 End user of an asset
250‑55 Tax preferred end user
250‑60 Tax preferred use of an asset
250‑65 Arrangement period for tax preferred use
250‑70 New tax preferred use at end of arrangement period if tax preferred use continues
250‑75 What constitutes a separate asset for the purposes of this Division
250‑80 Treatment of particular arrangements in the same way as leases

Financial benefits in relation to tax preferred use
250‑85 Financial benefits in relation to tax preferred use of an asset
250‑90 Financial benefit provided directly or indirectly
250‑95 Expected financial benefits in relation to an asset put to tax preferred use
250‑100 Present value of financial benefit that has already been provided

Discount rate to be used in working out present values
250‑105 Discount rate to be used in working out present values

Predominant economic interest
250‑110 Predominant economic interest
250‑115 Limited recourse debt test
250‑120 Right to acquire asset test
250‑125 Effectively non‑cancellable, long term arrangement test
250‑130 Meaning of effectively non‑cancellable arrangement
250‑135 Level of expected financial benefits test
250‑140 When to retest predominant economic interest under section 250‑135

Overall test

250‑10  When this Division applies to you and an asset
  This Division applies to you and an asset at a particular time if:
 (a) the general test in section 250‑15 is satisfied in relation to you and