Document ID: chunk:federal_register_of_legislation:C2011C00610:clause:3_2:p7
Version: federal_register_of_legislation:C2011C00610
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 7/9)
Character Range: 149177–151727

the lessee's assessable income of any income year under subsection (2), except to the extent (if any) that the lessee could deduct the *luxury car lease payments made apart from this Division.

Subdivision 242‑E—Extension, renewal and final ending of the lease

Guide to Subdivision 242‑E

242‑75  What this Subdivision is about

      When a luxury car lease ends (whether it expires or is terminated before its expiry date), one of 3 things will happen:

                (a) if the lease is extended or renewed—the original notional loan is treated as having been repaid and the lessor is treated as having made a new loan to the lessee; or
                (b) if the lessee acquires the car from the lessor—the lessee continues to own the car for tax purposes, and the actual transfer and the termination payment to acquire the car are ignored for tax purposes; or
                (c) if the lessee's right to use the car ends—the lessee is treated as having sold the car back to the lessor.
      In each case, there may be adjustments under Subdivision 242‑D to ensure that the right amount has been taxed over the term of the lease.

Table of sections

Operative provisions

242‑80 What happens if the term of the lease is extended or the lease is renewed
242‑85 What happens if an amount is paid by the lessee to acquire the car
242‑90 What happens if the lessee stops having the right to use the car

Operative provisions

242‑80  What happens if the term of the lease is extended or the lease is renewed

 (1) The rules in this section have effect if, after the end of the lease (or the end of any extension of the lease term or renewal of the lease), the lessee continues to have the *right to use the *car because the term of the lease is extended (or further extended) or the lease is renewed (or further renewed).

 (2) This Act has effect as if the lessee continued to be the owner of the *car until the end of the lease as extended or renewed.

 (3) However, this Act has effect as if the lessee stopped being the owner of the *car if:
 (a) the lessee enters into a sublease in respect of the car; and
 (b) this Division applies to the car in respect of that sublease.

 (4) This Act has effect as if the notional loan that arose because of the grant of the lease, or because of the previous extension or renewal, had been repaid.

Note: Also, Subdivision 242‑D (about balancing adjustments) will apply to the ending, extension or renewal.

 (5) This Act has effect as if, on the grant of the extension or renewal, the lessor had