Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 (15 of 2009)

Schedule 1   Amendments

Part 2   Consequential amendments

Income Tax Assessment Act 1936

40   Subsection 128NBA(5)

Repeal the subsection, substitute:

Net financial arrangement amount

(5) For the purposes of this section, if:

(a) in the case of a qualifying security - the sum of all amounts (if any) included in the assessable income of the taxpayer of any years of income in relation to the qualifying security, attributable agreement payment or payment of interest under section 159GQ; or

(b) in the case of a Division 230 financial arrangement - the sum of all amounts (if any) included in the assessable income of the taxpayer of any years of income in relation to the arrangement under Division 230 of the Income Tax Assessment Act 1997;

exceeds:

(c) in the case of a qualifying security - the sum of all amounts (if any) allowable as deductions from the assessable income of the taxpayer of any years of income in relation to the security or the payment, as the case may be, under that section; or

(d) in the case of a Division 230 financial arrangement - the sum of:

(i) all amounts (if any) allowable as deductions from the assessable income of the taxpayer of any years of income in relation to the arrangement under Division 230 of the Income Tax Assessment Act 1997; and

(ii) all amounts (if any) of interest paid under the arrangement before the interest mentioned in paragraph (1)(a) is paid;

there is a net financial arrangement amount equal to the excess.

(6) For the purposes of paragraph (5)(b) and subparagraph (5)(d)(i), disregard any year of income in which the taxpayer was not an
Australian resident.

(7) For the purposes of subsection (6):

(a) if section 230-485 of the Income Tax Assessment Act 1997 applies in relation to a year of income:

(i) treat the foreign residency period mentioned in that section as a year of income in which the taxpayer was not an Australian resident; and

(ii) treat the Australian residency period mentioned in that section as a year of income in which the taxpayer was an Australian resident; and

(b) if section 230-490 of that Act applies in relation to a year of income:

(i) treat the period during that year in which the taxpayer was not an Australian resident as a year of income in which the taxpayer was not an Australian resident; and

(ii) treat the period during that year in which the taxpayer was an Australian resident as a year of income in which the taxpayer was an Australian resident.