INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 3A - Convertible notes  

SECTION 82M   NEW LOANS AND REPLACEMENT LOANS  

82M(1)  
Where:


(a) a loan to a company is made, and is wholly made, by money being paid to the company at the time when the loan is made; and


(b) the loan is not part of or related to a transaction, or is not one of a series of related transactions, under which the person making the loan is to receive or has received, for the purpose of enabling him or her to make, or of assisting him or her in making, the loan, any money or other property from the company, or from another company or person as a result of arrangements made with that other company or person by the first-mentioned company;

the loan shall, for the purposes of this Division, be treated as a new loan.

82M(2)  
Where:


(a) a loan to a company is, under subsection (1), to be treated as a new loan for the purposes of this Division;


(b) the loan is not evidenced, acknowledged or created by a convertible note or is not a loan to which a convertible note otherwise applies;


(c) the loan is for a fixed period;


(d) the rate of interest payable in respect of the loan is the same in respect of all periods occurring before the date by which the whole of the loan is to be repaid, redeemed or satisfied; and


(e) the loan is, in whole or in part, converted into another loan to the company or to another company, or the loan is, in whole or in part, converted into a part of another loan to the company or to another company and the remainder of the other loan:


(i) is made by money being paid to the company or other company at the time when the loan is made; and

(ii) would, if it were a separate loan, be a loan that, under subsection (1), is to be treated as a new loan for the purposes of this Division;

that other loan shall, for the purposes of this Division, be treated as an approved replacement loan.


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