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Taxation Determination

TD 94/53

Income tax: what is an appropriate treatment for funds that have been raised under an infrastructure borrowing, but which are not immediately used?

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FOI status:

may be releasedFOI number: I 1217523

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

1. Funds that are intended to be spent on the construction of one or more infrastructure facilities, or the construction or acquisition of one or more related facilities, might be raised before expenditure is contractually required to be made for the construction or acquisition of the facilities. Funds that are intended to be lent by way of a further infrastructure borrowing might be raised before the infrastructure borrowing is to be made. In such cases the funds may be placed on deposit before they are used.

2. Raising of funds is not of itself evidence that the funds are intended to be spent in a manner prescribed by section 159GZZZZA of the Income Tax Assessment Act 1936 and the placement of funds on deposit does not constitute an expenditure of money for the purposes of section 159GZZZZA.

3. Interest received from the placement by the borrower of such funds on deposit before their use would be assessable income of the borrower; it is not due in relation to the infrastructure borrowing itself. Interest paid by the borrower is not deductible to the borrower: subsection 159GZZZZE(1). It is due in relation to the infrastructure borrowing.

Commissioner of Taxation
16/6/94

Previously issued as Draft TD 94/D6

References

ATO references:
NO Public Infrastructure Unit; PIU DTD 94/D6

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 94/49
TD 94/50
TD 94/51
TD 94/52

Subject References:
infrastructure borrowing

Legislative References:
ITAA 159GZZZV
ITAA 159GZZZZA
ITAA 159GZZZZE(1)

TD 94/53 history
  Date: Version: Change:
You are here 16 June 1994 Original ruling  
  7 December 2016 Withdrawn  

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