Income Tax Assessment Act 1997



Division 245 - Forgiveness of commercial debts  

Subdivision 245-C - Calculation of gross forgiven amount of a debt  

Working out the value of a debt

SECTION 245-60   Special rule for working out the value of a non-recourse debt  

The value of a debt when it is *forgiven is the lesser of:

(a) the amount of the debt outstanding at that time; and

(b) the *market value at that time of the creditor ' s rights mentioned in paragraph (2)(b).

Subsection (1) applies to a debt if:

(a) you incurred the debt directly in respect of financing:

(i) the acquisition of property by you; or

(ii) the construction or development of property by you;
(but not including the manufacture of goods); and

(b) the creditor ' s rights against you in the event of default in the payment of the debt or interest were, just before the debt was forgiven, limited to all or any of the following:

(i) rights (including the right to money payable) in relation to all or any of the matters mentioned in subsection (3);

(ii) rights in respect of a mortgage or other security over the property;

(iii) rights arising out of any *arrangement relating to the financial obligations, in relation to the property, of the *end user of the property to you.

For the purposes of subparagraph (2)(b)(i), the matters are as follows:

(a) the property or the use of the property;

(b) goods produced, supplied, carried, transmitted or delivered by means of the property;

(c) services provided by means of the property;

(d) the loss or *disposal of the whole or a part of the property or of your interest in the property.


Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.