Deduction for Sale and Lease back( taxation law: case study)

Deduction for Sale and Lease back The facts: The issues Whether company X could get deduction in respect of 2m of lease payment and whether Y could get deduction for depreciation of 2m in respect of the plant. Advises to X Are the factory and plant fixture? Commissioner may argue that factory and plant consisted of fixtures, sale agreement is ineffective to vest any title in company Y. Therefore, the lease is ineffective to confer …

…amp;gt;1.6875 Written Down Value<Tab/>13.3125 Year2 Depreciation<Tab/>1.4977 Written Down Value<Tab/>11.8148 Year3 Depreciation<Tab/>1.3292 Written Down Value<Tab/>10.4856 Year 4 Depreciation<Tab/>1.1796 Written Down Value<Tab/>9.3060 Conclusion for Y: Based on the above calculation, Y Co Ltd can only claim depreciation of 1.69 million as at 30 June 2001.