Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p24
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 24/35)
Character Range: 4118169–4121099

(4) This is how to work out the total net capital allowance deductions that would otherwise be allowable taking into account the amount of the debt that is unpaid:

      Working out the total net capital allowance deductions that would otherwise be allowable
      Work out the amount that would be worked out under subsection (2) if the deductions and the amounts included in assessable income had been calculated using the following assumptions:
         (1) The original expenditure in respect of which deductions were calculated was reduced by the amount of the debt that was unpaid by the debtor when the debt was terminated. (In calculating the amount unpaid the following are to be disregarded:

                (a) any reduction in the amount as a result of the *financed property being surrendered or returned to the creditor at the termination of the debt;
                (b) any reduction in the amount to the extent that it is funded directly or indirectly by *non‑arm's length limited recourse debt or by the consideration for the disposal of the debtor's interest in the financed property.)

         (2) Deductions for income years after the income year in which the termination occurred were also taken into account.
         (3) The original expenditure in respect of which deductions were calculated was increased by any amount that is paid by the debtor as consideration for another person assuming a liability under the debt. (This assumption does not apply to the extent that the consideration is funded directly or indirectly by *non‑arm's length limited recourse debt or by the consideration for the disposal of the debtor's interest in the *financed property.)
         (4) Step 2 were omitted from subsection (2).

Subdivision 243‑C—Amounts included in assessable income and deductions

Table of sections

Operative provisions
243‑40 Amount included in debtor's assessable income
243‑45 Deduction for later payments in respect of debt
243‑50 Deduction for payments for replacement debt
243‑55 Effect of Division on later capital allowance deductions
243‑57 Effect of Division on later capital allowance balancing adjustments
243‑58 Adjustment where debt only partially used for expenditure

Operative provisions

243‑40  Amount included in debtor's assessable income
  The debtor's assessable income for the income year in which the termination occurs is to include the excess referred to in subsection 243‑35(1).
Note: Section 243‑60 applies in relation to certain partnership debts.

243‑45  Deduction for later payments in respect of debt
 (1) This section applies if:
 (a) an amount was included in the debtor's assessable income under section 243‑40 or a deduction was reduced under section 243‑55; and
 (b) the debtor makes a payment to the creditor, after the termination of the debt arrangement, in respect of the debt (other than an amount to the extent to which it is a payment of interest,