Division 132—Leases

Table of sections

132-1 Lessee incurs expenditure to get lease term varied or waived

132-5 Lessor pays lessee for improvements

132-10 Grant of a long-term lease

132-15 Lessee of land acquires reversionary interest of lessor

32-1 Lessee incurs expenditure to get lease term varied or waived

If the lessee of property incurs expenditure in obtaining the consent of the lessor to vary or waive a term of the lease, the fourth element of the lease’s *cost base and *reduced cost base includes the amount of that expenditure.

The expenditure can include giving property: see section 103-5.

132-5 Lessor pays lessee for improvements

The fourth element of the *cost base and *reduced cost base of property that was subject to a lease includes any payment (because of the lease expiring or being surrendered or forfeited) by the lessor to the lessee for expenditure of a capital nature incurred by the lessee in making improvements to the lease property.

The payment or expenditure can include giving property: see section 103-5.

132-10 Grant of a long-term lease

(1) These rules apply if *CGT event F2 happens for a lessor of property.

(2) For any later *CGT event that happens to the land or the lessor’s lease of it, its *cost base and *reduced cost base (including the cost base and reduced cost base of any building, part of a building, structure or improvement that is treated as a separate *CGT asset) excludes:

(a) any expenditure incurred before *CGT event F2 happens; and

(b) the *cost of any *plant for which the lessor has deducted or can deduct for depreciation under this Act.

Note: Subdivision 108-D sets out when a building, structure or improvement is treated as a separate CGT asset.

(3) The fourth element of the property’s *cost base and *reduced cost base includes any payment by the lessor to the lessee to vary or waive a term of the lease or for the forfeiture or surrender of the lease.

(4) The expenditure or payment can include giving property: see section 103-5.

132-15 Lessee of land acquires reversionary interest of lessor

(1) This table sets out what happens if:

(a) the lessee of land *acquires the reversionary interest of the lessor in the land; and

(b) Subdivision 124-J (roll-over provisions for Crown leases) does not apply to the acquisition.

 

Lessee acquires reversionary interest of lessor



Item



In this situation:

The lessee is taken to have *acquired the land at this time:


The lessee is taken to have acquired the land for:

1

The lease was originally granted for 99 years or more

When the lease was granted or assigned to the lessee

Any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to *acquire the reversionary interest

2

The lease was originally granted for less than 99 years

When the lessee *acquired the reversionary interest

(a) if the lessee *acquired the lease after 19 September 1985—any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to acquire the reversionary interest; or

(b) if the lessee acquired the lease before 20 September 1985—the market value of the land when the lessee acquired it

(2) All the payments can include giving property: see section 103-5.

 

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