net income from primary production means the amount (if any) remaining after deducting from the assessable primary production income of the trust estate of the year of income so much of the aggregate of the relevant primary production deductions allowable in calculating the net income of the trust estate as does not exceed that assessable primary production income.
notional net income from primary production means:
(a) where the trust estate had a non‑primary production profit in relation to the year of income and did not incur a primary production loss in relation to the year of income:
(i) in a case to which subparagraph (ii) does not apply—the amount ascertained by deducting from the eligible net income the actual net income from primary production (if any); and
(ii) where the eligible net income exceeds the actual net income from primary production in relation to the year of income and that excess is greater than $5,000—$5,000 reduced by $1 for each whole dollar by which the amount of that excess exceeds $5,000; and
(b) where the trust estate had a non‑primary production profit in relation to the year of income and incurred a primary production loss in relation to the year of income:
(i) in a case where the sum of the eligible net income and the eligible part of the primary production loss is less than or equal to $5,000—the eligible net income; and
(ii) in a case where the sum of the eligible net income and the eligible part of the primary production loss (which sum is in this subparagraph referred to as the non‑farm income) exceeds $5,000—an amount ascertained by deducting from $5,000 one dollar for each whole dollar by which so much of the non‑farm income as does not exceed $10,000 exceeds $5,000 and deducting from the resultant amount so much (if any) of the eligible part of the primary production loss as does not exceed that resultant amount.
relevant primary production deductions means:
(a) any deductions allowed or allowable in calculating the amount of the net income of the trust estate of the year of income that relate exclusively to assessable primary production income of a year of income;
(b) so much of any other deductions (other than apportionable deductions) allowed or allowable in calculating the amount of that net income as, in the opinion of the Commissioner, may appropriately be related to assessable primary production income of the trust estate of a year of income; and
(c) the amount that bears to the apportionable deductions allowed or allowable in calculating the amount of that net income the same proportion as the amount ascertained by deducting from the assessable primary production income of the trust estate of the year of income any deductions allowable from that assessable primary production income in accordance with paragraphs (a) and (b) bears to the sum of the net income of the trust estate and the apportionable deductions.
(7) For the purposes of subsection (6), a trust estate shall be taken to have incurred a primary production loss in relation to a year of income if the aggregate of the relevant primary production deductions allowable in calculating the amount of the net income of the trust estate of the year of income exceeds the assessable primary production income of the trust estate of the year of income, and the amount of that loss shall be taken to be the amount of the excess.
(8) For the purposes of subsection (6), a trust estate shall be taken to have a non‑primary production profit in relation to a year of income if the assessable income of the trust estate of the year of income other than assessable primary production income exceeds the aggregate of the deductions (other than relevant primary production deductions) allowable in calculating the amount of the net income of the trust estate of the year of income.
157 Application of Division to primary producers
(1) In respect of income derived during the year ending on 30 June 1938 and during any subsequent year or during any accounting period adopted in lieu of any such year, the foregoing provisions of this Division shall not apply except in respect of income derived by a primary producer.
(2) For the purposes of this section, primary producer means a person who carries on in Australia a primary production business.
(3) Subject to subsection (3A), for the purposes only of determining whether a person is carrying on a primary production business, a beneficiary in a trust estate shall, to the extent to which he or she is presently entitled to the income or part of the income of that estate, be deemed to be carrying on the business carried on by the trustees of the estate which produces that income.
(3A) Subsection (3) does not operate to deem a beneficiary in a trust estate who is presently entitled to the income or a part of the income of that estate to be carrying on the business carried on by the trustees of the trust estate in a year of income unless:
(a) the share of the income of that trust estate of the year of income to which the beneficiary is presently entitled is not less than $1,040; or
(b) the Commissioner is satisfied that the interest of the beneficiary in the trust estate was not acquired by, or granted to, the beneficiary for the purpose, or primarily for the purpose, of enabling the provisions of this Division to apply in respect of income derived by the beneficiary.
(4) If in any year in respect of which this Division applies only to taxpayers who are primary producers, a taxpayer was not carrying on business as a primary producer, that year shall not be counted as an average year and the provisions of this Division shall apply to the income thereafter derived by the taxpayer as if he or she had never been a taxpayer before that year.
158 Application of Division
This Division shall not apply in any case where there are not at least 2 average years or where the taxpayer is assessed in accordance with section 99A in respect of the year of income, and shall not apply to the taxable income of a company except income in respect of which it is assessable as a trustee.
158A Election that Division not apply
(1) A taxpayer may elect that this Division shall not apply in relation to income of the taxpayer of a year of income specified in the election and of all subsequent years of income.
(2) An election in pursuance of subsection (1) shall be made in writing and lodged with the Commissioner on or before the date of lodgment of the return of income of the taxpayer for the year of income specified in the election or within such further time as the Commissioner allows.
(3) Where a taxpayer makes an election under subsection (1), this Division shall not apply in relation to income of the taxpayer of the year of income specified in the election or of any subsequent year of income.
Division 16D—Certain arrangements relating to the use of property
159GE Interpretation
(1) In this Division:
arrangement includes:
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct whether unilateral or otherwise.
arrangement payment, in relation to an arrangement relating to the use, or the control of the use, of an item of property, means so much of any payment liable to be made under the arrangement as represents consideration for any one or more of the following:
(a) the use of the item;
(b) the control of the use of the item;
(c) the sale or disposal of the item.
arrangement period, in relation to an item of eligible property that is, or is included in, arrangement property in relation to an arrangement at a particular time, means the period that is at that time the total period during which the arrangement is likely to be in force in relation to that item of eligible property (including any period before that time when the arrangement was in force in relation to that item of eligible property).
arrangement property means property that is, or is to be, used, or the use of which is, or is to be, controlled, under an arrangement.
assessable arrangement payment means an arrangement payment that, apart from this Division, would be included in whole or in part in the assessable income of a taxpayer of a year of income.
associate means, in relation to a person other than an exempt public body, any person who is an associate, within the meaning of section 318, in relation to the person or, in relation to an exempt public body:
(a) a partner of the exempt public body or a partnership in which the exempt public body is a partner; or
(b) if a partner of the exempt public body is a natural person otherwise than in the capacity of trustee—the spouse or a child of that partner; or
(c) a trustee of a trust where the exempt public body, or another entity that is an associate of the exempt public body because of paragraph (a), (b) or (d), benefits under the trust; or
(d) a company where:
(i) the company is sufficiently influenced by:
(A) the exempt public body; or
(B) another entity that is an associate of the exempt public body because of paragraph (a), (b) or (c); or
(C) another company that is an associate of the exempt public body because of another application of this paragraph; or
(D) 2 or more entities covered by the preceding sub‑subparagraphs; or
(ii) a majority voting interest in the company is held by:
(A) the exempt public body; or
(B) the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and paragraphs (a), (b) and (c); or
(C) the exempt public body and the entities that are associates of the exempt public body because of subparagraph (i) of this paragraph and because of paragraphs (a), (b) and (c).
Subsections 318(6) and (7) apply for the purposes of paragraphs (a) to (d) in the same way as those subsections apply for the purposes of section 318.
capital expenditure deduction means a deduction:
(a) under the former Division 10, 10AAA, 10AA, 10A, 10C or 10D of this Part; or
(b) under Subdivision 40‑B of the Income Tax Assessment Act 1997 for a depreciating asset that is a forestry road or timber mill building; or
(c) under Division 43 of that Act; or
(d) under section 40‑830 of that Act for an amount that is a project amount under subsection 40‑840(1) (about mining capital expenditure and transport capital expenditure); or
(e) under the former Subdivision 330‑C, 330‑H or 387‑G of that Act.
control means effectively control.
depreciation deduction means a deduction:
(a) in respect of depreciation under Division 3 of this Act or the former Division 42 of the Income Tax Assessment Act 1997; or
(b) for the decline in value of a depreciating asset under Division 40 of the Income Tax Assessment Act 1997.
Division 10, 10AA or 10A property means property in relation to which there has been incurred:
(a) allowable capital expenditure within the meaning of the former Division 10 or 10AA of this Part or the former Subdivision 330‑C of the Income Tax Assessment Act 1997 or mining capital expenditure within the meaning of section 40‑860 of that Act;
(b) expenditure taken into account in ascertaining an amount of residual capital expenditure specified in the former paragraph 122C(1)(a); or
(c) capital expenditure specified in the former subsection 124F(1) or 124JA(1) of this Act or the former section 387‑460 of the Income Tax Assessment Act 1997; or
(d) capital expenditure on a forestry road in connection with a timber operation, or capital expenditure for the construction or acquisition of a timber mill building.
Division 10AAA property means property in relation to which there has been incurred capital expenditure to which the former Division 10AAA of this Part applies or transport capital expenditure within the meaning of the former Subdivision 330‑H, or section 40‑865 of the Income Tax Assessment Act 1997.
Division 10C or 10D property means property in relation to which there has been incurred qualifying expenditure within the meaning of the former Division 10C or 10D or for which there is a pool of construction expenditure within the meaning of Division 43 of the Income Tax Assessment Act 1997.
effective life, in relation to an item of eligible property at a particular time, means the period (if any) that the Commissioner estimates will be, or would be, at that time the effective life of the property after that time assuming that it is or would be maintained in reasonably good order and condition.
eligible amount, in relation to an item of eligible property, means:
(a) where the item is an item of eligible depreciation property—the amount that:
(i) was the cost of the item of property within the meaning of Division 40, or the former Division 42, of the Income Tax Assessment Act 1997 to the taxpayer who holds it; or
(ii) would have been the cost of the item of property to the taxpayer for the purposes of that Division if that Division had applied in relation to the item of property; and
(b) where the item is an item of eligible capital expenditure property—any amount of eligible capital expenditure in relation to the item of property.
eligible capital expenditure, in relation to an item of eligible capital expenditure property, means expenditure by reason of which the item of property is eligible capital expenditure property.
eligible capital expenditure property means Division 10, 10AA or 10A property, Division 10AAA property, Division 10C or 10D property or eligible spectrum licences.
eligible depreciation property means:
(a) plant or articles within the meaning of the former section 54 of this Act; or
(b) plant within the meaning of the former section 42‑18 of the Income Tax Assessment Act 1997 or plant within the meaning of section 45‑40 of that Act; or
(c) a depreciating asset within the meaning of Division 40 of that Act.
eligible property means:
(a) eligible depreciation property;
(b) Division 10, 10AA or 10A property;
(c) Division 10AAA property;
(d) Division 10C or 10D property; or
(e) eligible spectrum licences.
eligible real property, means eligible property that is:
(a) a building or a part of a building; or
(b) a structure that is a fixture or a part of such a structure.
eligible spectrum licence means a spectrum licence within the meaning of the Income Tax Assessment Act 1997.
exempt public body means:
(a) the Commonwealth, a State or a Territory; or
(aa) an STB (within the meaning of Division 1AB) the income of which is wholly exempt from tax; or
(b) a municipal corporation or other local governing body, the income of which is wholly exempt from tax; or
(c) a public authority:
(i) that is constituted by or under a law of the Commonwealth, a State or a Territory; and
(ii) the income of which is wholly exempt from tax.
payment portion, in relation to an arrangement payment in relation to an eligible amount in relation to an item of eligible property, means so much of the arrangement payment as the Commissioner considers is attributable to the eligible amount in relation to the item of eligible property.
person includes an exempt public body.
total notional principal, in relation to an eligible amount in relation to an item of eligible property in relation to an application period, means the sum of all notional principal amounts (if any) in relation to payment portions of arrangement payments in relation to the eligible amount in relation to the application period.
Note: This Division applies to deductions under Division 40 (Capital allowances) and Division 43 (Capital works) of the Income Tax Assessment Act 1997 as if you were the owner of an asset you hold (under that Division) instead of any other person: see section 40‑135 of that Act.
(2) For the purposes of the definition of arrangement period in subsection (1), a reference in that definition to the total period during which an arrangement is, at a particular time, likely to be in force in relation to an item of eligible property that at that time is, or is included in, arrangement property in relation to the arrangement is a reference to:
(a) where at that time the total period during which the arrangement was, or is, to be in force in relation to that item of eligible property (including any period before that time when the arrangement was in force in relation to that item) was or is specified in or ascertainable in accordance with the arrangement—that period; and
(b) in any other case—such period as would have been, or is, at that time the period during which the arrangement would be, or is, likely to be in force in relation to the item of property (including any period before that time when the arrangement was in force in relation to the item), having regard to the provisions of the arrangement and any other relevant circumstances in relation to the arrangement, or in relation to the item of property.
(3) Nothing in this Division prevents an item of eligible property from being an item of eligible property by reason of the application of 2 or more paragraphs of the definition of eligible property in subsection (1).
(4) For the purposes of the definition of total notional principal in subsection (1), where:
(a) under section 159GK there is an interest amount within the meaning of that section in relation to a payment portion (not being a notional final payment portion within the meaning of that section) in relation to an arrangement payment; and
(b) the interest amount is less than the amount of the payment portion;
there shall be taken to be a notional principal amount in relation to the payment portion of an amount equal to the difference between the interest amount and the amount of the payment portion.