Income Tax Act 2007 section 681AH

Payments made for later periods

Section 681AH prevents taxpayers from avoiding the sale and leaseback restrictions (in sections 681AE to 681AG) by labelling bunched-up payments as if they relate to future periods rather than the current one.

• The "relevant year" for any payment is the twelve-month period beginning on the date the payment is actually made.
• If a payment is stated to be entirely for a period falling after the relevant year, it is nevertheless treated as made for the relevant year.
• If a payment covers a period that only partly extends beyond the relevant year, the portion relating to the later period is pulled back and treated as made for the relevant year instead.
• The effect is that no part of any payment can be allocated to a period later than the relevant year, closing off attempts to spread or defer payments to circumvent the deduction limits.