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Draft Taxation Determination

TD 93/D246

Income tax: when Division 16D of the Income Tax Assessment Act 1936 applies to an arrangement a proportion of each arrangement payment, representing the notional principal amount, may be treated as non-assessable by the operation of subsection 159GK(1). In such cases will a proportion of the funding costs relating to the non-assessable amount be disallowed under subsection 51(1)?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 94/2.

FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. No. The funding costs of an arrangement to which Division 16D applies are considered to relate wholly to the assessable notional interest amount. No deduction will be denied under subsection 51(1) in relation to the notional principal amount of any arrangement payment.

Commissioner of Taxation
23 September 1993

References


BO Public Infrastructure Unit DTD/06

ISSN 1038 - 8982

Subject References:
Allowable deductions
Finance arrangements
Lease financing

Legislative References:
ITAA 51(1)
ITAA 159GK(1)


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