Income Tax Assessment Act 1997
A debt arrangement is taken to have terminated if:
(a) it is actually terminated; or
(b) the debtor ' s obligation to repay the debt is waived, novated or otherwise varied so as to reduce, transfer or extinguish the debt; or
(c) an agreement is entered into to waive, novate or otherwise vary the debtor ' s obligation to repay the debt so as to reduce, transfer or extinguish the debt; or
(d) the creditor ceases to have an entitlement to recover the debt from the debtor (other than as a result of an *arm ' s length assignment of some or all of the creditor ' s rights under the debt arrangement); or
(e) the debtor ceases to be the owner or the *quasi-owner of some or all of the *debt property because that property is surrendered to the creditor because of the debtor ' s failure to pay the whole or a part of the debt; or
(f) the debtor ceases to be the owner of a beneficial interest in some or all of the debt property because the interest is surrendered to the creditor because of the debtor ' s failure to pay the whole or a part of the debt; or
(g) the debt becomes a bad debt.
However, a debt arrangement that is a notional loan arising because of Division 240 (about arrangements treated as a sale and loan) is not taken to have terminated merely because it has been renewed or extended.
Under Division 240 , notional loans are taken to have ended if the relevant arrangement is renewed or extended.
Where a debt is terminated under paragraph (1)(b) or (c) as a result of the debt being reduced, the remaining debt is taken to be a new debt to which section 243-15 applies.
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