Section 681DC: Sum obtained
1063.This section specifies four alternative additional conditions for the Chapter to apply. It is based on sections 781(1) and (9) and 783(3) of ICTA.
1064.All four of the conditions concern the obtaining of a capital sum by a person of the description specified in the condition. In particular, the person obtaining the capital sum need not be the person making the tax-deductible payment.
1065.In conditions B and C in subsections (1) and (2), the capital sum is obtained in respect of the lessee’s interest in the lease. In condition B, the capital sum is obtained by the person making the payment. In condition C, the capital sum is obtained by an associate of that person.
1066.Subsection (1)(a) is the first provision in this Chapter which refers to obtaining a sum in respect of an interest in a lease and, specifically, to obtaining a sum in respect of the lessee’s interest in a lease. The former expression is defined in section 681DG. The latter expression is defined in section 681DH.
1067.The word “associate” appears in subsection (2) for the first time in this Chapter. It is defined in section 681DL.
1068.In conditions D and E in subsections (3) and (4), the capital sum is obtained in respect of the lessor’s interest in the lease, or of any other interest in the asset. In condition D, the capital sum is obtained by an associate of the person making the payment. In condition E, the interest belongs to an associate of that person and the capital sum is obtained by an associate of that associate.
1069.Subsection (5) makes it clear that, for the purposes of this section, it is irrelevant when the payment is made.
1070.Subsections (6) and (7) relate to hire-purchase agreements for plant or machinery. Subsection (6) makes an exception to conditions B and C. Subsection (7) makes an exception to conditions D and E.
