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Edited version of private advice
Authorisation Number: 1051761933909
Date of advice: 6 October 2020
Ruling
Subject: Commercial paper investment
Question 1
Does Division 230 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to the commercial paper investment?
Answer
No
Question 2
Is the company entitled to deduct the loss arising on the maturity of the commercial paper investment pursuant to section 8-1 of the ITAA 1997?
Answer
Yes
Reasons for decision
Division 230 of the ITAA 1997 does not apply as the company had not made the relevant election for the arrangement to be included under Division 230 of the ITAA 1997.
The loss was incurred in gaining or producing assessable income of the company and is not considered to be capital or of a capital nature. Therefore, it is deductible under section 8-1 of the ITAA 1997.