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  • Limited recourse debt terminations

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Under proposed legislation contained in Taxation Law Amendment Bill (No.5) 1999, when plant is acquired under a limited recourse debt arrangement-including hire purchase-which terminates after 27 February 1998 and part of the hire purchase or debt principal remains unpaid, an adjustment to assessable income may be required.

    The adjustment is equal to the amount by which the total amount of the deductions allowed for the plant under the depreciation provisions exceeds the total amount of the deductions which would be allowable if based on actual outlays. If you are not sure how to work out your adjustment to assessable income contact your professional tax adviser or ring the ATO.

    Last modified: 07 Jan 2005QC 27380