(a) under 2 or more successive arrangements relating to the use by a person, or the control by a person of the use, of property owned by another person, the same property is used by, or the use of the same property is controlled by, the same person or by persons who, in relation to each other, are associates; and
(b) the Commissioner considers that the arrangements should be taken, for the purposes of this Division, to be a single arrangement;
the arrangements shall, for the purposes of this Division, be deemed to be a single arrangement entered into at the same time as the first of the arrangements, coming into force at the same time as the first of the arrangements and continuing in force until the expiration of the second or last, as the case requires, of the arrangements.
(6) A reference in subsection (5) to successive arrangements includes a reference to:
(a) where the arrangement periods of 2 or more arrangements overlap—those arrangements; and
(b) where there is a period between the expiration of an arrangement and the commencement of another arrangement and the Commissioner considers that the arrangements should be taken to be successive arrangements for the purposes of that subsection—those arrangements.
(7) Where this Division applies in relation to an item of eligible property in relation to a qualifying arrangement, a reference in this Division to the application period in relation to that application of this Division in relation to the item of eligible property is a reference to the period commencing at the time at which this Division in that application commences to apply and ending at the time at which this Division in that application ceases to apply.
(8) For the purposes of this Division, where one or more of the partners in a partnership uses, or controls the use of, an item of property, each of the partners in the partnership shall be taken to use, or to control the use of, the item of property and the partnership shall be taken not to use, or to control the use of, the item of property.
(10) For the purpose of this Division, disregard an acquisition or disposal of property by way of the transfer of the property for the provision or redemption of a security. Consequently this Division applies as if the person who was the owner of the property before the transfer continues to be the owner after the transfer.
159GEA Division applies to certain State/Territory bodies
In addition to any other operation that this Division has, this Division operates as if the references to an exempt public body included a reference to a prescribed excluded STB (within the meaning of Division 1AB).
159GF Residual amounts
(1) Subject to subsection 159GJ(1), in this Division a reference to the residual amount at a particular time (in this subsection referred to as the relevant time) in relation to the eligible amount by reason of which an item of property is eligible depreciation property at the relevant time is a reference to the eligible amount reduced by:
(a) where the item of property was not dealt with by the taxpayer who holds the item in the prescribed manner at any time during the period (in this subsection referred to as the relevant period) before the relevant time when it was held by the taxpayer (within the meaning of Division 40 of the Income Tax Assessment Act 1997)—the total amount of deductions for depreciation or decline in value that would, but for any deduction denying provision, have been allowable to the taxpayer under this Act or the Income Tax Assessment Act 1997 in respect of that item of property for the relevant period if:
(i) at all times during the relevant period the taxpayer had wholly and exclusively dealt with the item of property in the prescribed manner; and
(ii) those deductions were calculated using the diminishing value method; and
(iii) section 57AG, as in force immediately before the commencement of section 1 of the Taxation Laws Amendment Act 1992, did not apply in relation to the item of property;
(b) where the item of property was wholly and exclusively dealt with by the taxpayer who held the item in the prescribed manner at all times during the relevant period—the total amount of deductions for depreciation or decline in value that were or, but for any deduction denying provision, would have been, allowed or allowable to the taxpayer in respect of the item of property for that period under this Act or the Income Tax Assessment Act 1997; and
(c) in any other case—the total amount of deductions for depreciation or decline in value that, but for any deduction denying provision, would have been allowable to the taxpayer who holds the item of property in respect of the item under this Act or the Income Tax Assessment Act 1997 for the relevant period if:
(i) the taxpayer had wholly and exclusively dealt with the item of property in the prescribed manner at all times during the relevant period; and
(ii) in respect of any part of the relevant period for which deductions for depreciation or decline in value were or, but for any deduction denying provision, would have been allowed or allowable under this Act or the Income Tax Assessment Act 1997—the deductions were allowable on the same basis and at the same percentage as was or would have been allowed or allowable for that part of the relevant period; and
(iii) in respect of any other part (in this subparagraph referred to as the relevant part) of the relevant period—the deductions were allowable:
(A) where the relevant part was immediately succeeded by another part of the relevant period in respect of which deductions for depreciation or decline in value were or, but for any deduction denying provision, would have been allowed or allowable under this Act or the Income Tax Assessment Act 1997—on the same basis and at the same percentage as was or would have been allowed or allowable in respect of that other part; and
(B) in any other case—on the same basis and at the same percentage as was or, but for any deduction denying provision, would have been allowed or allowable under this Act or the Income Tax Assessment Act 1997 in respect of the part of the relevant period for which deductions for depreciation or decline in value was or would have been allowed or allowable, being the part that immediately preceded the relevant part.
(2) For the purposes of subsection (1):
(a) an item of eligible depreciation property shall be taken to be dealt with by a taxpayer in the prescribed manner at a particular time if:
(i) the item of property is used by the taxpayer at that time for the purpose of producing assessable income; or
(ii) the item of property is, at that time, installed ready for use for the purpose of producing assessable income and held in reserve by the taxpayer; and
(b) a reference to a deduction denying provision is a reference to a provision of this Act that would have the effect of denying an entitlement in whole or in part to a deduction otherwise wholly allowable under this Act.
(3) Subject to subsection 159GJ(2), where any of the following amounts (in this subsection referred to as the attributable amount):
(a) an amount of residual previous capital expenditure within the meaning of the former Division 10 or 10AA;
(b) an amount of residual capital expenditure within the meaning of the former Division 10, 10AA or 10A;
(c) an amount of residual (1 May 1981 to 18 August 1981) capital expenditure within the meaning of the former Division 10 or 10AA;
(d) an amount of residual (19 August 1981 to 19 July 1982) capital expenditure within the meaning of the former Division 10 or 10AA;
(e) so much as is unrecouped of an amount of allowable (post‑19 July 1982) capital expenditure within the meaning of the former Division 10 or 10AA;
(f) so much as is unrecouped of an amount of allowable capital expenditure within the meaning of the former Subdivision 330‑C of the Income Tax Assessment Act 1997;
(fa) so much of an amount of mining capital expenditure or transport capital expenditure (within the meaning of the Income Tax Assessment Act 1997) as has not been deducted under Division 40 of that Act;
(g) the difference between capital expenditure and previous deductions as defined in the former subsection 387‑470(1) of the Income Tax Assessment Act 1997;
(h) the difference between the cost of a forestry road or timber mill building for the purposes of Division 40 of the Income Tax Assessment Act 1997 and its adjustable value for the purposes of that Division;
ascertained as at the end of a year of income, is attributable in whole or in part to an amount of expenditure (in this subsection referred to as the relevant expenditure) by reason of which an item of property is Division 10, 10AA or 10A property, in this Division a reference to the residual amount at any time during the year of income in relation to the relevant expenditure is a reference to so much of the attributable amount as is attributable to the relevant expenditure.
(4) Subject to subsection 159GJ(3), in this Division a reference to the residual amount at a particular time in relation to an amount of expenditure by reason of which an item of property is Division 10AAA property is a reference to the amount of expenditure reduced by any part of that expenditure that has been allowed or is allowable as a deduction under the former Division 10AAA of this Part or the former Subdivision 330‑H of the Income Tax Assessment Act 1997, or under Subdivision 40‑I of that Act for transport capital expenditure, from the assessable income of any taxpayer of a year of income preceding the year of income in which the particular time occurs.
(5) Subject to subsection 159GJ(4), in this Division a reference to the residual amount at a particular time in relation to an amount of expenditure by reason of which an item of property is Division 10C or 10D property is a reference to the residual capital expenditure within the meaning of the former Division 10C or 10D of this Part, or to the undeducted construction expenditure within the meaning of Division 43 of the Income Tax Assessment Act 1997, as appropriate, at that time in relation to the amount of expenditure.
(6) In this Division, a reference to the residual amount at a particular time in relation to an amount of expenditure because of which an item of property is an eligible spectrum licence is a reference to:
(a) the amount of unrecouped expenditure (within the meaning of the former section 380‑20 of the Income Tax Assessment Act 1997) on that licence at that time; or
(b) the adjustable value of that licence (within the meaning of Division 40 of that Act) at that time.
159GG Qualifying arrangements
(1) For the purposes of this Division, where at any time (in this subsection referred to as the relevant time) any of the following conditions is satisfied in relation to an arrangement relating to the use by a person (in this subsection referred to as the end‑user), or to the control by a person (in this subsection also referred to as the end‑user) of the use, of property owned by another person who is a party to the arrangement, being property that is or includes an item of eligible property:
(a) the arrangement contains provision to the effect that:
(i) if:
(A) on the termination or expiration of the arrangement, the owner sells or otherwise disposes of the whole of the arrangement property, or part of the arrangement property that is or includes the item of eligible property, to any person; and
(B) the owner or an associate receives in respect of the sale or disposal no consideration, or consideration of an amount less than an amount (in this subparagraph referred to as the guaranteed residual value) specified in, or ascertainable under, the provision;
the end‑user or an associate will pay to the owner or an associate an amount equal to the guaranteed residual value, or to the amount by which the guaranteed residual value exceeds the consideration, as the case may be;
(ii) at or after the termination or expiration of the arrangement, the whole of the arrangement property or part of the arrangement property that is or includes the item of eligible property is to be transferred (whether or not for any consideration) to the end‑user or an associate;
(iii) the end‑user or an associate has or will have the right to purchase or to require the transfer of the whole of the arrangement property or part of the arrangement property that is or includes the item of eligible property; or
(iv) the arrangement period in relation to the item of eligible property in relation to the arrangement is a period that exceeds 1 year and the end‑user or an associate will be liable to carry out, to expend money in respect of or to reimburse the owner or an associate for expenditure in respect of, repairs that may be required to the whole of the arrangement property or to part of the arrangement property that is or includes the item of eligible property;
(b) the arrangement period in relation to the item of eligible property in relation to the arrangement is equal to or greater than:
(i) where the item is an item of eligible real property—50% of the effective life of that item at the commencement of the arrangement period; or
(ii) in any other case—75% of the effective life of that item at the commencement of the arrangement period;
(c) the sum of:
(i) the payment portions of arrangement payments that were liable to be made at or before the relevant time in relation to the eligible amount, or in relation to all of the eligible amounts (including any eligible amount in respect of expenditure incurred after the commencement of the arrangement period), in relation to the item of eligible property; and
(ii) the payment portions of arrangement payments that, having regard to the provisions of the arrangement and any other relevant circumstances, are or were, at the relevant time, likely to become liable to be made after the relevant time in relation to the eligible amount, or in relation to all of the eligible amounts (including any eligible amount in respect of expenditure that, having regard to the provisions of the arrangement and any other relevant circumstances, is or was likely to be incurred during the arrangement period), in relation to the item of eligible property;
is equal to or greater than 90% of the sum of:
(iii) the residual amount in relation to the eligible amount, or the sum of the residual amounts in relation to the eligible amounts, in respect of which expenditure was incurred before the commencement of the arrangement period in relation to the item of eligible property, as ascertained at the commencement of the arrangement period; and
(iv) the amount of any expenditure that was, or is likely to be, incurred during the arrangement period, being expenditure giving rise to an eligible amount in relation to the item of eligible property;
the arrangement shall be taken to be, or to have been, a qualifying arrangement in relation to the item of eligible property:
(d) at the relevant time; and
(e) at all times before the relevant time when the arrangement was in force in relation to the item of eligible property.
(2) For the purposes of this Division, where:
(a) an item of eligible property is, or is included in, arrangement property in relation to an arrangement relating to the use by a person (in this subsection referred to as the end‑user), or to the control by a person (in this subsection also referred to as the end‑user) of the use, of property owned by another person who is a party to the arrangement; and
(b) the ownership of the item of eligible property is transferred to the end‑user or an associate within 1 year after the arrangement ceases to be in force (whether by termination or expiration) in relation to the item of eligible property;
the arrangement shall be taken to have been a qualifying arrangement in relation to the item of eligible property at all times during the period during which the arrangement was in force in relation to the item of eligible property.
(3) For the purposes of subsections (1) and (2):
(a) a lease to a person of property owned by another person shall be taken to be an arrangement relating to the use by the person of property owned by the other person; and
(b) any arrangement entered into in relation to the lease referred to in paragraph (a) shall be taken to be part of the arrangement referred to in that paragraph.
(4) Where, but for this subsection, an arrangement would be a qualifying arrangement in relation to an item of eligible property at a particular time (in this subsection referred to as the relevant time) and the Commissioner, having regard to:
(a) the circumstances by reason of which the arrangement is a qualifying arrangement in relation to that item of eligible property; and
(b) any other relevant circumstances;
considers it unreasonable that the arrangement should be a qualifying arrangement at the relevant time in relation to the item of eligible property, the arrangement shall be taken not to be a qualifying arrangement at the relevant time in relation to the item of eligible property.
(5) Where an arrangement is a qualifying arrangement in relation to an item of eligible property at a particular time (in this subsection referred to as the relevant time) and the arrangement ceases to be a qualifying arrangement in relation to that item of eligible property at a later time, the arrangement shall not be taken not to have been a qualifying arrangement in relation to that item of eligible property at the relevant time by reason of it ceasing to be a qualifying arrangement in relation to that item of eligible property at the later time.
159GH Application of Division in relation to property