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Lease Transactions

8.195. Division 4 of Part III of the Act contains special provisions dealing with premiums received in relation to the grant, assignment or surrender of a lease and improvements erected by lessees on leased property. However, the application of these provisions was restricted in 1964 and they are no longer generally available. A number of submissions have sought the reintroduction of provisions similar to Division 4 along lines recommended by the Ligertwood Committee.

8.196. In Section IV the Committee has made recommendations for the allowance of depreciation on buildings, including a tentative proposal in relation to allowances in respect of leasehold improvements carried out at a lessee's expense.

8.197. With the introduction of capital gains tax some changes in the law will be necessary in respect of lease transactions generally. Until such time as the Government's proposals in relation to leases under the capital gains tax legislation are known, it would be inappropriate for this Committee to attempt to make detailed recommendations in this area. Clearly the income tax provisions must be blended with those relating to capital gains tax.

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