Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 243 - Limited recourse debt  

Subdivision 243-C - Amounts included in assessable income and deductions  

Operative provisions

SECTION 243-45   Deduction for later payments in respect of debt  

243-45(1)  
This section applies if:


(a) an amount was included in the debtor's assessable income under section 243-40 or a deduction was reduced under section 243-55 ; and


(b) the debtor makes a payment to the creditor, after the termination of the debt arrangement, in respect of the debt (other than an amount to the extent to which it is a payment of interest, of *notional interest or in the nature of interest).

243-45(2)  
This is how to work out the amount of the deduction: Working out the amount of the deduction


Step 1.

Work out the amount that would be worked out under subsection 243-35(2) if the debt were terminated immediately before the payment.


Step 2.

Work out the amount that would have been worked out under subsection 243-35(4) at that time if the payment had been taken into account.


Step 3.

The amount of the deduction is the amount (if any) by which the amount worked out under Step 2 exceeds the amount worked out under Step 1.

243-45(3)  
The amount can be deducted for the income year in which the payment is made. Limit on deductions

243-45(4)  
The total amounts deducted under this section in respect of a debt, and under section 243-50 in respect of a replacement debt, cannot exceed the sum of:


(a) any amounts included in the debtor's assessable income under this Division in respect of the original debt; and


(b) any amount by which deductions in respect of the original debt were reduced under section 243-55 .


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