Commonwealth Numbered Acts

INCOME TAX ASSESSMENT AMENDMENT ACT 1976 No. 50 of 1976 - SECT 10

10. After section 82AAR the following Subdivision is inserted:-

''Subdivision B-Investment Allowance Property to which Subdivision applies.
''82AA. Subject to the following provisions of this Subdivision, this
Subdivision applies in relation to a unit of eligible property acquired or
constructed by the taxpayer that is-

   (a)  in the case of any taxpayer, for use by the taxpayer wholly and
        exclusively-

        (i)    in Australia; and

        (ii)   for the purpose of producing assessable income otherwise than
               by-

                (A)  the leasing of the eligible property;

                (B)  the letting of the eligible property on hire under a
                     hire-purchase agreement; or

                (C)  the granting to other persons of rights to use the
                     eligible property; or

   (b)  in the case of a taxpayer being a leasing company, for use wholly and
        exclusively-

        (i)    in Australia; and

        (ii)   for the purpose of producing assessable income,

by another person to whom the taxpayer has, on or after 1 January 1976, leased
the eligible property under a long-term lease agreement that was entered into
by the taxpayer in the course of carrying on business in Australia and was so
entered into by the taxpayer and the other person at arm's length. Deduction
in respect of new plant installed on or after 1 January 1976.
''82AB. (1) Subject to this Subdivision, where-

   (a)  on or after 1 January 1976, a taxpayer has incurred expenditure of a
        capital nature (in this section referred to as 'eligible expenditure')
        in respect of the acquisition or construction by him of a new unit of
        eligible property in relation to which this Sub-division applies;

   (b)  the eligible expenditure exceeded $500;

   (c)  the eligible expenditure was incurred-

        (i)    in respect of a unit of property acquired by the taxpayer under
               a contract entered into on or after 1 January 1976 and before 1
               July 1983; or

        (ii)   in respect of a unit of property that was constructed by the
               taxpayer and the construction of which commenced on or after 1
               January 1976 and before 1 July 1983; and

   (d)  the unit of property was first used or installed ready for use before
        1 July 1984, there shall be allowed as a deduction from the taxpayer's
        assessable income of the first year of income during which that unit
        was either used for the purpose of producing assessable income, or
        installed ready for use for that purpose, an amount (in this section
        referred to as the 'relevant amount') ascertained in accordance with
        the following provisions of this section.

''(2) Where the eligible expenditure was incurred-

   (a)  in respect of a unit of property acquired by the taxpayer under a
        contract entered into before 1 July 1978; or

   (b)  in respect of a unit of property that was constructed by the taxpayer
        and the construction of which commenced before 1 July 1978, and was so
        incurred in respect of a unit of property that was first used or
        installed ready for use before 1 July 1979, the relevant amount is
        such percentage of the amount of the eligible expenditure as is
        prescribed by sub-section (3).

''(3) For the purposes of sub-section (2), the prescribed percentage in
relation to an amount of eligible expenditure is-

   (a)  where the eligible expenditure is less than $526-2 per centum;

   (b)  where the eligible expenditure is not less than $526 but is less than
        $976-2 per centum increased by 2 per centum for each whole $25 by
        which the amount of the eligible expenditure exceeds $501; or

   (c)  where the eligible expenditure is not less than $976-40 per centum.

''(4) Where-

   (a)  the eligible expenditure was incurred-

        (i)    in respect of a unit of property acquired by the taxpayer under
               a contract entered into before 1 July 1978; or

        (ii)   in respect of a unit of property that was constructed by the
               taxpayer and the construction of which commenced before 1 July
               1978,

and was so incurred in respect of a unit of property that was first used or
installed ready for use on or after 1 July 1979; or

   (b)  the eligible expenditure was incurred-

        (i)    in respect of a unit of property acquired by the taxpayer under
               a contract entered into on or after 1 July 1978; or

        (ii)   in respect of a unit of property that was constructed by the
               taxpayer and the construction of which commenced on or after 1
               July 1978, the relevant amount is such percentage of the amount
               of the eligible expenditure as is prescribed by sub-section
               (5).

''(5) For the purposes of sub-section (4), the prescribed percentage in
relation to an amount of eligible expenditure is-

   (a)  where the eligible expenditure is less than $526-1 per centum;

   (b)  where the eligible expenditure is not less than $526 but is less than
        $976-1 per centum increased by 1 per centum for each whole $25 by
        which the amount of the eligible expenditure exceeds $501; or

   (c)  where the eligible expenditure is not less than $976-20 per centum.

''(6) A reference in the foregoing provisions of this section to use, or to
the installation ready for use, of a unit of property shall, in the case of a
unit of property to which paragraph (b) of section 82AA applies, be construed
as a reference to use, or to installation ready for use, of the unit of
property by the lessee.

''(7) Where-

   (a)  a leasing company leases to another person (in this sub-section
        referred to as the 'lessee') property acquired by the leasing company
        from that other person;

   (b)  the leasing company would not, but for this sub-section, be entitled
        to a deduction under this Subdivision in respect of the property by
        reason only that, before the property was acquired by the leasing
        company, it was used, or held for use, by the lessee;

   (c)  the period during which the property was used, or held for use, by the
        lessee before the property was acquired by the leasing company did not
        exceed 6 months; and

   (d)  the Commissioner is satisfied that the acquisition or construction of
        the property by the lessee, the acquisition of the property by the
        leasing company from the lessee and the leasing of the property by the
        leasing company to the lessee occurred in pursuance of a contract or
        arrangement entered into on or after 1 January 1976 and that the
        leasing company and the lessee entered into the contract or
        arrangement at arm's length, then, for the purposes of this
        Subdivision, the expenditure by the leasing company in respect of its
        acquisition of the property shall be deemed to have been incurred in
        respect of the acquisition of a new unit of property and, if the lease
        of the property by the leasing company to the lessee was entered into
        after the property was first used, or installed ready for use, by the
        lessee, the property shall be deemed to have been first used, or
        installed ready for use, by the lessee on the date on which the lease
        agreement was entered into.

''(8) A deduction is not allowable under this Subdivision in respect of
expenditure incurred by a taxpayer in respect of the acquisition or
construction of a unit of property that is leased by the taxpayer to another
person (in this sub-section referred to as the 'lessee') if, before 1 January
1976, the taxpayer entered into a contract or arrangement to lease the
property to the lessee or to a third person. Limitation of deduction in case
of leased property.
''82AC. The amount of the deduction, or the total of the amounts of the
deductions, allowable under this Subdivision to a taxpayer, being a leasing
company, in respect of a year of income, in relation to a unit of eligible
property that is, or units of eligible property that are, leased to another
person or other persons, shall not exceed the amount (if any) that remains
after deducting from the assessable income of the taxpayer of the year of
income all allowable deductions other than-

   (a)  deductions allowable under this Subdivision in relation to a unit or
        units of property leased by the taxpayer to another person or other
        persons; or

   (b)  deductions allowable under section 80 or 80AA. Lessor may transfer
        benefit of deduction to lessee.
''82AD. (1) Where a leasing company that would, but for this section, be
entitled to a deduction under this Subdivision from the assessable income of
the company of the year of income (in this sub-section referred to as the
'relevant deduction') in respect of property leased to another person (in this
sub-section referred to as the 'lessee') has, before the prescribed date,
lodged with the Commissioner-

   (a)  a declaration in writing, signed by the public officer of the company,
        stating that the company transfers to the lessee the benefit of the
        whole, or of a specified fraction, of the relevant deduction, or the
        benefit of so much of the relevant deduction as does not exceed an
        amount specified in the declaration; and

   (b)  a statement, signed by the public officer of the company, containing
        the following particulars:-

        (i)    a description of the property;

        (ii)   the date on which the property was acquired or the construction
               of the property was commenced;

        (iii)  the amount of expenditure incurred by the company in respect of
               the acquisition or construction of the property;

        (iv)   the date on which the company entered into the relevant lease
               agreement;

        (v)    the name and address of the lessee; and

        (vi)   the period for which the lessee agreed to take the property on
               lease, there shall be allowed as a deduction from the
               assessable income of the lessee of the year of income during
               which the property was either first used, or installed ready
               for use, by the lessee-

   (c)  if the declaration by the company stated that the company transferred
        to the lessee the benefit of the whole of the relevant deduction-an
        amount equal to the relevant deduction;

   (d)  if the declaration by the company stated that the company transferred
        to the lessee a specified fraction of the relevant deduction-an amount
        equal to that fraction of the relevant deduction; or

   (e)  if the declaration by the company stated that the company transferred
        to the lessee the benefit of so much of the relevant deduction as does
        not exceed an amount specified in the declaration-an amount equal to
        so much of the relevant deduction as does not exceed the amount so
        specified.

''(2) For the purposes of sub-section (1), the prescribed date, in relation to
property leased by a leasing company to another person, is-

   (a)  where the agreement for the lease was or is entered into before 1 July
        1976-8 July 1976; or

   (b)  in any other case-the eighth day after the end of the month in which
        the agreement for the lease is entered into, or, if the Commissioner
        has agreed to an extension of the period for lodgment of a declaration
        by the leasing company in relation to that property, the last day of
        the extended period.

''(3) Where-

   (a)  a deduction would, but for this section, be allowable to a leasing
        company under this Subdivision from its assessable income of a year of
        income in respect of property leased to another person (in this
        sub-section referred to as the 'lessee'); and

   (b)  by virtue of sub-section (1), a deduction has been allowed or is
        allowable in respect of the property from the assessable income of the
        lessee, the amount of the deduction that would, but for this section,
        be allowable to the leasing company under this Subdivision in respect
        of that property shall be reduced by the amount of the deduction so
        allowed or allowable to the lessee.

''(4) In determining for the purposes of this section whether a deduction
would, but for this section, be allowable to a leasing company under this
Subdivision from its assessable income of a year of income in respect of a
unit of property and the amount of any such deduction, section 82AC shall be
disregarded. Subdivision not to apply to certain structural improvements.
''82AE. This Subdivision does not apply in relation to structural improvements
other than-

   (a)  plumbing fixtures and fittings to which paragraph (c) of sub-section
        (2) of section 54 applies, not being fixtures or fittings for use in
        or in connexion with the provision for employees of facilities for
        entertainment, amusement or gambling or for engaging in cultural,
        sporting or recreational pursuits or in any similar activities; or

   (b)  structural improvements of the following kinds that are on land used
        for the purpose of carrying on a business of primary production:-

        (i)    fences to exclude live stock from areas affected by soil
               erosion, where the purpose of excluding the live stock is to
               prevent or limit any extension or aggravation of soil erosion
               in those areas and to assist in the reclamation of those areas;

        (ii)   fences enclosing or partly enclosing areas affected by
               naturally occurring deposits of mineral salt;

        (iii)  fences to subdivide the land for the purpose of carrying on
               primary production on the land, other than boundary fences,
               fences enclosing yards or fences along public roads, public
               stock routes or other public rights of way;

        (iv)   structural improvements for the purpose of conserving water for
               use in carrying on primary production on the land (including
               dams, earth tanks, underground tanks, concrete tanks and stands
               for tanks), irrigation channels or similar improvements for the
               purpose of conveying water for such use and bores or wells for
               water for such use;

        (v)    pipes placed underground for the purpose of conveying water for
               use in carrying on primary production on the land; and

        (vi)   buildings or other structural improvements for the purpose of
               the storage of grain, hay or fodder in the course of carrying
               on primary production on the land. Subdivision not to apply to
               certain other property.
''82AF. (1) This Subdivision does not apply in relation to-

   (a)  appliances (including wireless receivers and television receivers and
        antennae) of a kind ordinarily used for household purposes, other than
        such appliances that are-

        (i)    for use in a business carried on by the taxpayer a substantial
               part of which consists of the provision by the taxpayer of
               accommodation for tourists or travellers; or

        (ii)   for use in premises used or held for use by the taxpayer
               principally for the purpose of deriving income in the nature of
               rent by the provision of accommodation for tourists or
               travellers; or

   (b)  furniture and furnishings, light fittings, partitions, fitting rooms,
        signs (including neon signs), shelving, cupboards, counters, display
        models, display cases, display stands and articles of a description,
        or having a use, similar to that of any of those articles, other than
        articles that are-

        (i)    for use in a business carried on by the taxpayer a substantial
               part of which consists of the provision by the taxpayer of
               accommodation for tourists or travellers;

        (ii)   for use in premises used or held for use by the taxpayer
               principally for the purpose of deriving income in the nature of
               rent by the provision of accommodation for tourists or
               travellers; or

        (iii)  for use by the taxpayer principally for the purpose of
               providing clothing cupboards, first-aid or rest-room
               facilities, or meals or facilities for meals, for persons
               employed by the taxpayer in a business carried on by him or for
               the care of children of those persons.

''(2) This Subdivision does not apply in relation to-

   (a)  motor vehicles (including vehicles known as four wheel drive vehicles)
        that are-

        (i)    motor cars, station wagons, panel vans, utility trucks or
               similar vehicles;

        (ii)   motor cycles or similar vehicles; or

        (iii)  other road vehicles designed to carry loads of less than 1
               tonne or fewer than 9 passengers;

   (b)  articles being, or being reproductions of, paintings, sculptures,
        drawings, engravings or photographs, or articles of a description, or
        having a use, similar to that of any of those articles;

   (c)  books;

   (d)  films, tapes, discs or other similar devices in which images or sounds
        are, or information is, stored or that are designed to be used for the
        storage of images, sounds or information;

   (e)  musical instruments and equipment for use in conjunction with musical
        instruments;

   (f)  plant or articles (other than plant or articles referred to in
        sub-section (1)) for use in, or primarily and principally in connexion
        with-

        (i)    amusement or recreation;

        (ii)   sport (including the racing of animals or vehicles) or physical
               exercise or any similar activities;

        (iii)  gaming or gambling;

        (iv)   circus performances or the performance in public of music,
               plays, dancing or similar entertainment; or

        (v)    the exhibition to the public of cinematographic films otherwise
               than by television broadcasting;

   (g)  plant or articles referred to in paragraph (h) or (i) of sub- section
        (3) of section 62AA or in paragraph (h) of sub-section (3) of section
        62AB;

   (h)  wharves or jetties; or

   (j)  wearing apparel (other than wearing apparel designed principally for
        protective purposes) and accessories to such apparel.

''(3) Except in a case to which sub-section (7) of section 82AB applies, this
Subdivision does not apply in relation to property leased by a leasing company
as mentioned in paragraph (b) of section 82AA if, before the property was so
leased, it was used by the leasing company or by any other person.

''(4) This Subdivision does not apply in relation to property acquired by a
taxpayer from another person, being property that was not trading stock of
that other person, if that other person acquired the property under a contract
entered into before 1 January 1976 or commenced construction of the property
before that date. Disposal, &c., of property within 12 months after
installation.
''82AG. (1) This Subdivision does not apply, and shall be deemed never to have
applied, in relation to property acquired or constructed by a taxpayer, not
being property that, in the case of a taxpayer being a leasing company, the
taxpayer has leased to another person, if, before the expiration of 12 months
after the property was first used, or installed ready for use, by the
taxpayer-

   (a)  the taxpayer disposed of the property or the property was lost or
        destroyed;

   (b)  the taxpayer leased the property, let the property on hire under a
        hire-purchase agreement or otherwise granted a right to another person
        to use the property; or

   (c)  the taxpayer used the property outside Australia or for a purpose
        other than the purpose of producing assessable income.

''(2) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer of a year of income in relation to property acquired or
        constructed by the taxpayer, not being property that, in the case of a
        taxpayer being a leasing company, the taxpayer has leased to another
        person; and

   (b)  before the expiration of 12 months after the property was first used,
        or installed ready for use, by the taxpayer, the taxpayer disposed of
        a part of his interest in the property, so much of the deduction as
        the Commissioner considers appropriate shall be deemed not to have
        been, or not to be, allowable, as the case may be.

''(3) This Subdivision does not apply, and shall be deemed never to have
applied, in relation to property leased by a leasing company to another person
(in this sub-section referred to as the 'lessee') if, before the expiration of
12 months after the property was first used, or installed ready for use, by
the lessee-

   (a)  the property was disposed of by the leasing company to a person other
        than the lessee or was lost or destroyed;

   (b)  the lessee used the property outside Australia or for a purpose other
        than the purpose of producing assessable income;

   (c)  the lease was terminated otherwise than by the acquisition of the
        property by the lessee;

   (d)  while the lease was in force the lessee entered into a contract or
        arrangement with another person for the use of the property by that
        other person; or

   (e)  the lessee acquired the property and disposed of it. Disposal, &c., of
        property after 12 months after installation.
''82AH. (1) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer of a year of income in relation to property acquired or
        constructed by the taxpayer, not being property that, in the case of a
        taxpayer being a leasing company, the taxpayer has leased to another
        person;

   (b)  after the expiration of 12 months after the property was first used,
        or installed ready for use, by the taxpayer-

        (i)    the taxpayer disposed of the property;

        (ii)   the taxpayer leased the property, let the property on hire
               under a hire-purchase agreement or otherwise granted a right to
               another person to use the property; or

        (iii)  the taxpayer used the property outside Australia or for a
               purpose other than the purpose of producing assessable income;
               and

   (c)  the Commissioner is satisfied that, at the time the property was
        acquired or constructed by the taxpayer, the taxpayer intended to
        dispose of the property, to lease the property, let the property on
        hire under a hire-purchase agreement or otherwise grant a right to
        another person to use the property, or to use the property as
        mentioned in sub-paragraph (iii) of paragraph (b), after becoming
        entitled to a deduction under this Subdivision in respect of the
        property, the deduction shall, if the Commissioner so determines, be
        deemed not to have been, or not to be, allowable, as the case may be.

''(2) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer of a year of income in relation to property acquired or
        constructed by the taxpayer, not being property that, in the case of a
        taxpayer being a leasing company, the taxpayer has leased to another
        person;

   (b)  after the expiration of 12 months after the property was first used,
        or installed ready for use, by the taxpayer, the taxpayer disposed of
        a part of his interest in the property; and

   (c)  the Commissioner is satisfied that, at the time the property was
        acquired or constructed by the taxpayer, the taxpayer intended to
        dispose of the whole or a part of his interest in the property after
        becoming entitled to a deduction under this Subdivision in respect of
        the property, then, if the Commissioner so determines, so much of the
        deduction as the Commissioner considers appropriate shall be deemed
        not to have been, or not to be, allowable, as the case may be.

''(3) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer being a leasing company of a year of income in relation to
        property leased by the taxpayer to another person (in this sub-section
        referred to as the 'lessee');

   (b)  after the expiration of 12 months after the property was first used,
        or installed ready for use, by the lessee and before the expiration of
        the term of the lease-

        (i)    the taxpayer disposed of the property to a person other than
               the lessee;

        (ii)   the lessee used the property outside Australia or for a purpose
               other than the purpose of producing assessable income;

        (iii)  the lease was terminated otherwise than by the acquisition of
               the property by the lessee;

        (iv)   while the lease was in force the lessee entered into a contract
               or arrangement with another person for the use of the property
               by that other person; or

        (v)    the lessee acquired the property and disposed of it; and

   (c)  the Commissioner is satisfied that, at the time when the lessee took
        the property on lease-

        (i)    in a case to which sub-paragraph (i) of paragraph (b)
               applies-the leasing company intended to dispose of the property
               to a person other than the lessee before the expiration of the
               term of the lease; or

        (ii)   in a case to which sub-paragraph (ii), (iii), (iv) or (v) of
               paragraph (b) applies-the lessee intended to use the property
               as mentioned in sub-paragraph (ii) of that paragraph, to cause
               the lease to be terminated as mentioned in sub-paragraph (iii)
               of that paragraph, to enter into a contract or arrangement as
               mentioned in sub-paragraph (iv) of that paragraph or to acquire
               and dispose of the property, the deduction shall, if the
               Commissioner so determines, be deemed not to have been, or not
               to be, allowable, as the case may be.

''(4) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer of a year of income in relation to property taken on lease by
        the taxpayer;

   (b)  after the expiration of 12 months after the property was first used,
        or installed ready for use, by the taxpayer-

        (i)    the taxpayer used the property outside Australia or for a
               purpose other than the purpose of producing assessable income;

        (ii)   the lease was terminated otherwise than by the expiration of
               the term of the lease or the acquisition of the property by the
               taxpayer;

        (iii)  while the lease was in force the taxpayer entered into a
               contract or arrangement with another person for the use of the
               property by that other person; or

        (iv)   the taxpayer acquired the property and disposed of it; and

   (c)  the Commissioner is satisfied that, at the time when the taxpayer took
        the property on lease, the taxpayer intended to use the property as
        mentioned in sub-paragraph (i) of paragraph (b), to cause the lease to
        be terminated as mentioned in sub-paragraph (ii) of that paragraph, to
        enter into a contract or arrangement as mentioned in sub-paragraph
        (iii) of that paragraph or to acquire and dispose of the property, the
        deduction shall, if the Commissioner so determines, be deemed not to
        have been, or not to be, allowable, as the case may be. Notional
        disposal of property under hirepurchase.
''82AI. For the purposes of sections 82AG and 82AH, if a taxpayer who took
property on hire under a hire-purchase agreement does or omits to do any act
or thing that results in the person (in this section referred to as the
'owner') from whom the taxpayer took the property on hire under that agreement
obtaining possession of the property-

   (a)  the taxpayer shall be deemed to have disposed of the property; and

   (b)  the disposal shall be deemed to have taken place at the time when
        possession of the property was so obtained by the owner. Special
        provisions relating to partnerships.
''82AJ. (1) Where-

   (a)  the individual interest of a taxpayer in the net income of a
        partnership has been or is to be included in the assessable income of
        the taxpayer of a year of income (in this sub-section and in
        sub-section (3) in its application in relation to this sub-section
        referred to as the 'relevant year of income'), or the individual
        interest of a taxpayer in a partnership loss has been allowed or is
        allowable as a deduction from the assessable income of the taxpayer of
        a year of income (in this sub-section and in sub-section (3) in its
        application in relation to this sub-section also referred to as the
        'relevant year of income');

   (b)  a deduction (in this sub-section and in sub-section (3) in its
        application in relation to this sub-section referred to as the
        'relevant deduction') under this Subdivision in respect of a unit of
        eligible property was taken into account in calculating the net income
        of the partnership, or the partnership loss, as the case may be; and

   (c)  before the expiration of 12 months after the property was first used
        or installed ready for use by the partnership, the taxpayer disposed
        of the whole or a part of his interest in the partnership or in the
        property, there shall be included in the assessable income of the
        taxpayer of the relevant year of income-

   (d)  where the taxpayer disposed of the whole of his interest in the
        partnership or in the property-the prescribed amount; or

   (e)  in any other case-so much of the prescribed amount as the Commissioner
        considers appropriate.

''(2) Where-

   (a)  the individual interest of a taxpayer in the net income of a
        partnership has been or is to be included in the assessable income of
        the taxpayer of a year of income (in this sub-section and in
        sub-section (3) in its application in relation to this sub-section
        referred to as the 'relevant year of income'), or the individual
        interest of a taxpayer in a partnership loss has been allowed or is
        allowable as a deduction from the assessable income of the taxpayer of
        a year of income (in this sub-section and in sub-section (3) in its
        application in relation to this sub-section also referred to as the
        'relevant year of income');

   (b)  a deduction (in this sub-section and in sub-section (3) in its
        application in relation to this sub-section referred to as the
        'relevant deduction') under this Subdivision in respect of a unit of
        eligible property was taken into account in calculating the net income
        of the partnership, or the partnership loss, as the case may be;

   (c)  after the expiration of 12 months after the property was first used or
        installed ready for use by the partnership, the taxpayer disposed of
        the whole or a part of his interest in the partnership or in the
        property; and

   (d)  the Commissioner is satisfied that, at the time the property was
        acquired or constructed by the partnership, the taxpayer intended to
        dispose of the whole or a part of his interest in the partnership or
        in the property after the partnership became entitled to a deduction
        under this Subdivision, there shall, if the Commissioner so
        determines, be included in the assessable income of the taxpayer of
        the relevant year of income-

   (e)  where the taxpayer disposed of the whole of his interest in the
        partnership or in the property-the prescribed amount; or

   (f)  in any other case-so much of the prescribed amount as the Commissioner
        considers appropriate.

''(3) For the purposes of sub-sections (1) and (2), the prescribed amount is-

   (a)  where the relevant deduction related to expenditure by the partnership
        in respect of the acquisition or construction of the relevant property
        and the partners have agreed as to the amount of that expenditure to
        be borne by the taxpayer-an amount that bears to the amount of the
        relevant deduction the same proportion as so much of the amount of
        that expenditure as the partners agreed was to be borne by the
        taxpayer bears to the amount of that expenditure; or

   (b)  in any other case-an amount that bears to the amount of the relevant
        deduction the same proportion as the individual interest of the
        taxpayer in the net income of the partnership of the year of income of
        the partnership that corresponds to the relevant year of income bears
        to that net income or, as the case requires, as the individual
        interest of the taxpayer in the partnership loss for that
        corresponding year of income of the partnership bears to that
        partnership loss.

''(4) In calculating the net income of a partnership, or a partnership loss,
in accordance with section 90, regard shall not be had to the provisions of
this Subdivision in so far as they apply to expenditure incurred in respect of
the acquisition or construction by the partnership of a unit of property that
is leased by the partnership to another person, but, where a partnership in
which any one or more of the partners is a leasing company has incurred such
expenditure, then, for the purposes of the application of this Subdivision in
respect of such a partner, that partner shall be deemed to have incurred-

   (a)  so much of the amount of that expenditure as the partners have agreed
        is to be borne by that partner; or

   (b)  if the partners have not agreed as to the part of that amount that is
        to be borne by that partner-so much of that amount as bears to that
        amount the same proportion as the individual interest of the partner
        in the net income of the partnership of the year of income in which
        the relevant expenditure was incurred bears to that net income or, as
        the case requires, as the individual interest of the partner in the
        partnership loss for that year of income bears to that partnership
        loss.

''(5) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer being a leasing company in relation to property acquired or
        constructed by a partnership in which the taxpayer is a partner, being
        property that is leased by the partnership to another person (in this
        sub-section referred to as the 'lessee'); and

   (b)  before the expiration of 12 months after the property was first used
        or installed ready for use by the lessee, the taxpayer disposed of the
        whole or a part of his interest in the partnership or in the property
        otherwise than to the lessee, then-

   (c)  where the taxpayer disposed of the whole of his interest in the
        partnership or in the property-the deduction shall be deemed not to
        have been, or not to be, allowable, as the case may be; or

   (d)  in any other case-so much of the deduction as the Commissioner
        considers appropriate shall be deemed not to have been, or not to be,
        allowable, as the case may be.

''(6) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer being a leasing company in relation to property acquired or
        constructed by a partnership in which the taxpayer is a partner, being
        property that is leased by the partnership to another person (in this
        sub-section referred to as the 'lessee');

   (b)  after the expiration of 12 months after the property was first used or
        installed ready for use by the lessee, the taxpayer disposed of the
        whole or a part of his interest in the partnership or in the property
        otherwise than to the lessee; and

   (c)  the Commissioner is satisfied that, at the time when the lessee took
        the property on lease, the taxpayer intended to dispose of the whole
        or a part of his interest in the partnership or in the property after
        becoming entitled to a deduction under this Subdivision in relation to
        the property, then, if the Commissioner so determines-

   (d)  where the taxpayer disposed of the whole of his interest in the
        partnership or in the property-the deduction shall, if the
        Commissioner so determines, be deemed not to have been, or not to be,
        allowable, as the case may be; or

   (e)  in any other case-so much of the deduction as the Commissioner
        considers appropriate shall be deemed not to have been, or not to be,
        allowable, as the case may be.

''(7) This Subdivision does not apply, and shall be deemed never to have
applied, in relation to property leased by a partnership to another person (in
this sub-section referred to as the 'lessee') if, before the expiration of 12
months after the property was first used, or installed ready for use, by the
lessee-

   (a)  the property was disposed of by the partnership to a person other than
        the lessee or was lost or destroyed;

   (b)  the lessee used the property outside Australia or for a purpose other
        than the purpose of producing assessable income;

   (c)  the lease was terminated otherwise than by the acquisition of the
        property by the lessee;

   (d)  while the lease was in force the lessee entered into a contract or
        arrangement with another person for the use of the property by that
        other person; or

   (e)  the lessee acquired the property and disposed of it.

''(8) Where-

   (a)  a deduction has been allowed, or would but for this sub-section be
        allowable, under this Subdivision from the assessable income of a
        taxpayer being a leasing company in relation to property acquired or
        constructed by a partnership in which the taxpayer is a partner, being
        property that is leased by the partnership to another person (in this
        sub-section referred to as the 'lessee');

   (b)  after the expiration of 12 months after the property was first used,
        or installed ready for use, by the lessee and before the expiration of
        the term of the lease-

        (i)    the property was disposed of by the partnership to a person
               other than the lessee;

        (ii)   the lessee used the property outside Australia or for a purpose
               other than the purpose of producing assessable income;

        (iii)  the lease was terminated otherwise than by the acquisition of
               the property by the lessee;

        (iv)   while the lease was in force the lessee entered into a contract
               or arrangement with another person for the use of the property
               by that other person; or

        (v)    the lessee acquired the property and disposed of it; and

   (c)  the Commissioner is satisfied that, at the time when the lessee took
        the property on lease-

        (i)    in a case to which sub-paragraph (i) of paragraph (b)
               applies-the partnership intended to dispose of the property to
               a person other than the lessee before the expiration of the
               term of the lease; or

        (ii)   in a case to which sub-paragraph (ii), (iii), (iv) or (v) of
               paragraph (b) applies-the lessee intended to use the property
               as mentioned in sub-paragraph (ii) of paragraph (b), to cause
               the lease to be terminated as mentioned in sub-paragraph (iii)
               of that paragraph, to enter into a contract or arrangement as
               mentioned in sub-paragraph (iv) of that paragraph or to acquire
               and dispose of the property, the deduction shall, if the
               Commissioner so determines, be deemed not to have been, or not
               to be, allowable, as the case may be. Private use of property
               by employees, &c., of private company.
''82AK. Where property that was acquired or constructed, or taken on lease, by
a taxpayer being a private company is used at any time for a private or
domestic purpose by-

   (a)  an employee of the company;

   (b)  a director of the company;

   (c)  a member of the company; or

   (d)  a relative of a person referred to in paragraph (a), (b) or (c), the
        property shall be deemed for the purposes of this Subdivision to have
        been used at that time by the company for a purpose other than the
        purpose of producing assessable income. Property acquired, &c., in
        substitution for other property.
''82AL. (1) Where the Commissioner is satisfied that-

   (a)  a contract or arrangement was entered into by a taxpayer before 1
        January 1976 for the acquisition, or taking on lease, by the taxpayer
        of a unit of property (in this sub-section referred to as the
        'original unit');

   (b)  on or after that date-

        (i)    the taxpayer entered into a contract (whether with the same or
               another person) for the acquisition or taking on lease (whether
               with or without the acquisition or taking on lease of other
               property) of the original unit or of another unit of property
               (in this sub-section referred to as the 'substituted unit')
               identical with, or having a purpose similar to that of, the
               original unit and intended by the taxpayer to be in lieu of the
               original unit; or

        (ii)   the taxpayer commenced the construction of a unit of property
               (in this sub-section also referred to as the 'substituted
               unit') identical with, or having a purpose similar to that of,
               the original unit and intended by the taxpayer to be in lieu of
               the original unit; and

   (c)  the taxpayer entered into the contract for acquisition or taking on
        lease of the original unit or of the substituted unit, or commenced
        the construction of the substituted unit, for the purpose, or for
        purposes that included the purpose, of obtaining a deduction under
        this Subdivision, the Commissioner may refuse to allow a deduction
        under this Sub-division-

   (d)  in a case to which sub-paragraph (i) of paragraph (b) applies-in
        relation to the original unit or the substituted unit; or

   (e)  in a case to which sub-paragraph (ii) of paragraph (b) applies-in
        relation to the substituted unit.

''(2) Where the Commissioner is satisfied that-

   (a)  a taxpayer commenced construction of a unit of property (in this
        sub-section referred to as the 'original unit') before 1 January 1976;

   (b)  on or after that date-

        (i)    the taxpayer commenced the construction of a unit of property
               (in this sub-section referred to as the 'substituted unit')
               identical with, or having a purpose similar to that of, the
               original unit and intended by the taxpayer to be in lieu of the
               original unit; or

        (ii)   the taxpayer entered into a contract for the acquisition or
               taking on lease (whether with or without the acquisition or
               taking on lease of other property) of the original unit or of
               another unit of property (in this sub-section also referred to
               as the 'substituted unit') identical with, or having a purpose
               similar to that of, the original unit and intended by the
               taxpayer to be in lieu of the original unit; and

   (c)  the taxpayer commenced the construction of the substituted unit, or
        entered into the contract for the acquisition or taking on lease of
        the original unit or the substituted unit, for the purpose, or for
        purposes that included the purpose, of obtaining a deduction under
        this Subdivision, the Commissioner may refuse to allow a deduction
        under this Sub-division-

   (d)  in a case to which sub-paragraph (i) of paragraph (b) applies-in
        relation to the substituted unit; or

   (e)  in a case to which sub-paragraph (ii) of paragraph (b) applies-in
        relation to the original unit or the substituted unit.

''(3) A reference in this section to a unit of property includes a reference
to a portion of a unit of property. Deduction under Subdivision to be in
addition to other deductions.
''82AM. (1) Notwithstanding the provisions of section 82, 122N, 123E or 124AN,
but subject to sub-section (2), the deduction allowable under this Subdivision
in respect of expenditure in respect of a unit of property is allowable in
addition to any deduction that is allowable in respect of that unit of
property under any other provision of this Act.

''(2) A deduction under this Subdivision is not allowable in respect of
expenditure in respect of a unit of property where a deduction in respect of
the expenditure has been allowed or is allowable under section 122J, 123B or
124AH. Ascertainment of amount of eligible expenditure.
''82AN. (1) Where, under a contract for the acquisition or construction of
property that includes a unit of eligible property, an amount (in this
sub-section referred to as the 'total cost') is expressed to be payable in
respect of the acquisition or construction of the whole of the property and no
separate amount is allocated to the eligible property, the amount payable in
respect of the acquisition or construction of the unit of eligible property
shall, for the purposes of this Subdivision, be taken to be such part of the
total cost as the Commissioner determines.

''(2) Where, under a contract for the acquisition or construction of eligible
property or under a contract for the acquisition of materials for use in the
construction of eligible property, an amount is expressed to be payable in
respect of the acquisition or construction of the property or in respect of
the acquisition of the materials, as the case may be, but the Commissioner is
satisfied that that amount exceeds-

   (a)  in the case of a contract for the construction of eligible property
        for the taxpayer by another person or persons on premises of the
        taxpayer-the market value of the property at the time of completion of
        the construction; or

   (b)  in any other case-the market value of the eligible property or
        materials at the date of the contract, the amount payable in respect
        of the acquisition or construction of the eligible property or in
        respect of the acquisition of the materials, as the case may be,
        shall, if the Commissioner so determines, be deemed, for the purposes
        of this Subdivision, to be the market value referred to in paragraph
        (a) or (b), whichever is applicable. Recoupment of expenditure.
''82AO. (1) This Subdivision does not apply, and shall be deemed never to have
applied, in relation to a taxpayer, to expenditure in respect of which the
taxpayer is recouped, or becomes entitled to be recouped, by the Commonwealth,
by a State, by the Administration of a Territory, by an authority constituted
by or under a law of the Commonwealth, of a State or of a Territory or by any
other person.

''(2) Where a taxpayer receives, or becomes entitled to receive, an amount
that constitutes to an unspecified extent a recoupment of expenditure of a
capital nature in respect of a unit of property in relation to which this
Subdivision applies, the Commissioner may, for the purposes of sub-section
(1), determine the extent to which the amount constitutes a recoupment of that
expenditure. Transitional.
''82AP. (1) Where-

   (a)  on or after 1 January 1976 and before the date of commencement of this
        Subdivision, a taxpayer being a leasing company entered into an
        agreement (in this sub-section referred to as the 'original
        agreement') with another person (in this sub-section referred to as
        the 'lessee') under which the lessee agreed to take property on lease
        for a period of less than 4 years; and

   (b)  on or before 30 June 1976 or such later date as the Commissioner
        determines, the lessee agreed or agrees to take the property on lease
        for a further period commencing at the expiration of the period
        referred to in paragraph (a) and ending not earlier than 4 years after
        the commencement of the period referred to in that paragraph, then,
        for the purposes of this Subdivision, the lessee shall be deemed to
        have agreed to take the property under the original agreement for a
        period of not less than 4 years.

''(2) Where-

   (a)  on or after 1 January 1976 and before the date of commencement of this
        Subdivision-

        (i)    a taxpayer entered into an agreement with another person not
               being a leasing company under which the taxpayer agreed to take
               property on lease; or

        (ii)   a taxpayer entered into an agreement with another person being
               a leasing company under which the taxpayer agreed to take
               property on lease for a period of less than 4 years; and

   (b)  on or before 30 June 1976 or such later date as the Commissioner
        determines, the taxpayer entered into an agreement with that other
        person for the acquisition of that property by the taxpayer, then, in
        determining for the purposes of this Subdivision whether expenditure
        in respect of the acquisition of that property by the taxpayer was
        incurred in respect of the acquisition of a new unit of property,
        regard shall not be had to any use or holding for use of that property
        by the taxpayer on or after 1 January 1976 and before the date on
        which the agreement referred to in paragraph (b) was entered into.
        Interpretation.
''82AQ. (1) In this Subdivision-

'construction' includes manufacture and 'constructed' has a corresponding
meaning;

'eligible property' means plant or articles within the meaning of section 54
and includes earth tanks constructed for the purpose of conserving water for
use in carrying on a business of primary production;

'hire-purchase agreement' means an agreement for letting property on hire
under which the person taking the property on hire has a right (either
absolutely or subject to conditions) to purchase the property but does not
include such an agreement under which, in determining whether any sum is
payable upon the exercise of that right and, if a sum is so payable, in
determining the amount so payable, no regard is had to any part of any payment
made under the agreement before the right is exercised;

'lease', in relation to property, means grant a lease of the property or let
the property on hire otherwise than under a hire-purchase agreement, and
cognate expressions have corresponding meanings;

'leasing company' means a corporation that carries on in Australia as its sole
or principal business-

   (a)  the business of banking; or

   (b)  the business of borrowing money and providing finance, not being a
        business the whole of the income from which is exempt income;

'long-term lease agreement', in relation to property, means an agreement under
which a person agrees to take the property on lease for a period of not less
than 4 years;

'new' means not having previously been either used by any person or acquired
or held by any person for use by that person, but does not include
reconditioned or wholly or mainly reconstructed.

''(2) The reference in the definition of 'leasing company' in sub- section (1)
to providing finance is a reference to-

   (a)  lending money, with or without security;

   (b)  letting property on hire under a hire-purchase agreement; or

   (c)  leasing property.

''(3) In this Subdivision-

   (a)  a reference to the acquisition of property by a person is a reference
        to-

        (i)    the person becoming the owner of the property or taking the
               property on hire under a hire-purchase agreement; or

        (ii)   the construction of the property for the person by another
               person or other persons on premises of the first-mentioned
               person;

   (b)  a reference to property being installed ready for use is a reference
        to property being installed ready for use and held in reserve; and

   (c)  a reference to taking property on lease is a reference to taking
        property on lease or on hire otherwise than under a hire-purchase
        agreement.''.