DB 18AB Deduction cap: disposal of residential land within 5 years to associated persons
When this section applies

(1)

This section applies to a person (person A) if, for an income year,—

(a)

person A derives income solely under section CB 6A (Disposal within 5 years: bright-line test for residential land) from disposing of residential land to an associated person; and

(b)

person A has deductions for expenditure or loss in relation to the disposal of the land (residential land deductions).

Deduction cap for person A and transfer to associated person

(2)

The total residential land deductions that person A is allowed are no more than the amount of income they derive under section CB 6A from the disposal of the land. Deductions not allowed to person A under this section are treated as expenditure that the associated person has in relation to acquiring the land.

Defined in this Act: associated person, deduction, dispose, income, income year, land, person, residential land

Section DB 18AB: inserted (with effect on 1 October 2015 and applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), on 16 November 2015, by section 10(1) of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).

Section DB 18AB heading: amended, on 29 March 2018 (applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), by section 46(1)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).

Section DB 18AB(1)(a): amended, on 29 March 2018 (applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), by section 46(1)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).