Document ID: chunk:federal_register_of_legislation:C2004C01257:clause:2_1:p1
Version: federal_register_of_legislation:C2004C01257
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 1/20)
Character Range: 10215–12959

1                          *Hire purchase agreement     Any goods                              None                                See Subdivision 240‑I

240‑15  Scope of Division

  This Division has effect for the purposes of this Act and for the purposes of the Income Tax Assessment Act 1936 other than:
 (a) Parts 3‑1 and 3‑3 of this Act and Part IIIA of the Income Tax Assessment Act 1936 (capital gains tax); and
 (b) Division 11A of Part III of the Income Tax Assessment Act 1936 (certain payments to non‑residents etc.).

Subdivision 240‑B—The notional sale and notional loan

Table of sections

Operative provisions

240‑17 Who is the notional seller and the notional buyer?
240‑20 Notional sale of property by notional seller and notional acquisition of property by notional buyer
240‑25 Notional loan by notional seller to notional buyer

Operative provisions

240‑17  Who is the notional seller and the notional buyer?

 (1) An entity is the notional seller if it is a party to the *arrangement and:
 (a) actually owns the property; or
 (b) is the owner of the property because of a previous operation of this Division.

 (2) An entity is the notional buyer if it is a party to the *arrangement and, under the arrangement, has the *right to use the property.

Example: If the arrangement is a hire purchase agreement, the finance provider will be the notional seller and the hirer will be the notional buyer.

240‑20  Notional sale of property by notional seller and notional acquisition of property by notional buyer

 (1) The *notional seller is taken to have disposed of the property by way of sale to the *notional buyer, and the notional buyer is taken to have acquired it, at the start of the *arrangement.

 (2) The *notional buyer is taken to own the property until:
 (a) the *arrangement ends; or
 (b) the notional buyer becomes the *notional seller under a later *arrangement to which this Division applies.

240‑25  Notional loan by notional seller to notional buyer

 (1) On entering into the *arrangement, the *notional seller is taken to have made a loan (the notional loan) to the *notional buyer.

 (2) The notional loan is for a period:
 (a) starting at the start of the *arrangement; and
 (b) ending on the day on which the arrangement is to cease to have effect or, if the arrangement is of indefinite duration, on the day on which it would be reasonable to conclude, having regard to the terms and conditions of the arrangement, that the arrangement will cease to have effect.

 (3) The notional loan is of an amount (the notional loan principal) equal to the consideration for the sale of the property less any amount paid, or credited by the *notional seller as having been paid, by the *notional buyer