Document ID: chunk:federal_register_of_legislation:C2011C00610:clause:2_2:p6
Version: federal_register_of_legislation:C2011C00610
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 6/7)
Character Range: 89821–92420

rate of interest, or rate of exchange between currencies, that affects the *market value of the debt;
 (b) each amount:
 (i) that you have deducted or can deduct as a result of the *forgiveness of the debt; and
 (ii) that is attributable to such a change.

 (3) Paragraph (1)(a) does not apply to the debt if:
 (a) either:
 (i) the creditor was an Australian resident at the forgiveness time; or
 (ii) the *forgiveness of the debt was a *CGT event involving a *CGT asset that was *taxable Australian property; and
 (b) you and the creditor were not dealing with each other at *arm's length in respect of you incurring the debt; and
 (c) the debt was not a *moneylending debt.

Note: This subsection reduces your gross forgiven amount to reflect the reduction in the creditor's loss on the forgiven debt under the capital gains tax regime.

 (4) This section has effect subject to sections 245‑60 and 245‑61 (about non‑recourse and assigned debts).

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

 (1) 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).

 (2) 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.

 (3) 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.

245‑61  Special rule for working out the value of a previously assigned debt

  If your debt has been assigned as mentioned in section 245‑36 and is later *forgiven by the new creditor, the value of that