21EConcurrent uses of land

1. This section applies when a registered person simultaneously uses the same area of land during an adjustment period for making concurrent taxable and non-taxable supplies. The percentages determined under this section apply for the purposes of sections 21A and 21G.

2. This section does not apply if the Commissioner agrees that the registered person may use another calculation method.

3. The extent to which the land is used for making taxable supplies is calculated as a percentage using the formula—

   $(consideration\; for\; taxable\; supply\; ÷\; total\; consideration\; for\; supply)\; \times \; 100.$

   Where:

4. In the formula in subsection (3),—

5. consideration for taxable supply is,—
   1. on a disposal of the land in the adjustment period, the amount paid or payable; or
   2. the market value of the land at the time of making the adjustment:
6. total consideration for supply is the sum of the amount referred to in paragraph (a) and the amount of—
   1. all rental income that is the consideration for the supply of a dwelling paid or payable since the land was acquired; and
   2. if no rental income is paid or payable in relation to the non-taxable use of the land, the market value of rental income that would have been paid or payable since the land was acquired if the land had been used for this purpose.

7. For the purposes of subsection (4), if the person disposes of the land to an associated person, or if the amount of rental income is not an arm's length amount, subsection (4)(a)(i) and (b)(i) do not apply, and the amount of the consideration is measured under subsection (4)(a)(ii) and (b)(ii).

8. For the purposes of subsection (4)(a)(ii) and (b)(ii), if the market value of the land or the market value of rental income is not readily identifiable, the person may use another method to provide a fair and reasonable estimate of the market value.

9. If a person is required to estimate the extent of taxable use of the land under this section and the land has at any time been used in a month solely for making non-taxable supplies, the person must calculate the percentage use for the adjustment period on a month by month basis, calculated using the formula—

   $(months\; ÷\; total\; months)\; \times \; result\; under\; subsection\; (3).$

   Where:

10. In the formula in subsection (7),—

11. months is the number of months since acquisition in which all or part of the land is used to some extent for making taxable supplies:
12. total months is the total number of months since acquisition.