Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 243 - Limited recourse debt  

Subdivision 243-A - Circumstances in which Division operates  

Operative provisions

SECTION 243-25   When is a debt arrangement terminated?  

243-25(1)    
A debt arrangement is taken to have terminated if:

(a) it is actually terminated; or

(b) the debtor ' s obligation to repay the debt is waived, novated or otherwise varied so as to reduce, transfer or extinguish the debt; or

(c) an agreement is entered into to waive, novate or otherwise vary the debtor ' s obligation to repay the debt so as to reduce, transfer or extinguish the debt; or

(d) the creditor ceases to have an entitlement to recover the debt from the debtor (other than as a result of an *arm ' s length assignment of some or all of the creditor ' s rights under the debt arrangement); or

(e) the debtor ceases to be the owner or the *quasi-owner of some or all of the *debt property because that property is surrendered to the creditor because of the debtor ' s failure to pay the whole or a part of the debt; or

(f) the debtor ceases to be the owner of a beneficial interest in some or all of the debt property because the interest is surrendered to the creditor because of the debtor ' s failure to pay the whole or a part of the debt; or

(g) the debt becomes a bad debt.

243-25(2)    

However, a debt arrangement that is a notional loan arising because of Division 240 (about arrangements treated as a sale and loan) is not taken to have terminated merely because it has been renewed or extended.

Note:

Under Division 240 , notional loans are taken to have ended if the relevant arrangement is renewed or extended.

243-25(3)    
Where a debt is terminated under paragraph (1)(b) or (c) as a result of the debt being reduced, the remaining debt is taken to be a new debt to which section 243-15 applies.