Division 245 - Forgiveness of commercial debts  

Subdivision 245-E - Application of net forgiven amounts  

Reduction of expenditure

SECTION 245-145   Remaining total net forgiven amount is applied in reduction of expenditure  


The *total net forgiven amount (if any) remaining after being applied under sections 245-115 and 245-130 is applied, to the maximum extent possible, in reduction, in accordance with sections 245-150 , 245-155 and 245-157 , of your expenditure that:

(a) is mentioned in the following table (other than expenditure covered by subsection (2)) and was incurred by you before the *forgiveness income year; and

(b) apart from this Subdivision, could be deducted by you for the forgiveness income year or a later income year if no event or circumstance (other than a *recoupment of the expenditure by you in the forgiveness income year) occurred that would affect its deductibility.

Table of expenditure
Item Column 1
General description of expenditure
Column 2
Provision under which a deduction is available for the expenditure
1 Expenditure deductible under Division 40 (Capital allowances) Division 40 of this Act
2 Expenditure incurred in * borrowing money to produce assessable income Section 25-25 of this Act
3 Expenditure on scientific research Subsection 73A(2) of the Income Tax Assessment Act 1936
4 Expenditure deductible under Division 355 (R & D) Division 355 of this Act
5 Advance revenue expenditure Subdivision H of Division 3 of Part III of the Income Tax Assessment Act 1936
6 Expenditure on acquiring a unit of industrial property to produce assessable income Subsection 124M(1) of the Income Tax Assessment Act 1936
7 Expenditure on Australian films Section 124ZAFA of the Income Tax Assessment Act 1936
8 Expenditure on assessable income-producing buildings and other capital works Section 43-10 of this Act


If the asset to which the expenditure relates was disposed of, lost or destroyed before 28 June 1996 or the expenditure was recouped before 28 June 1996, see section 245-10 of the Income Tax (Transitional Provisions) Act 1997 .

Expenditure is covered by this subsection if:

(a) it was incurred in respect of an asset you *disposed of to an entity that you dealt with at *arm ' s length in respect of the disposal; and

(b) the disposal occurred during the *forgiveness income year before the *forgiveness of any debt owed by you, and the forgiveness resulted in a *net forgiven amount; and

(c) no provision of this Act includes an amount in your assessable income, or allows you a deduction, as a result of the disposal.

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