Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 26/35)
Character Range: 4123318–4126019

account.
           Step 3. The amount of the deduction is the amount (if any) by which the amount worked out under Step 2 exceeds the amount worked out under Step 1.
 (3) The amount can be deducted for the income year in which the payment is made.

Division not to apply to termination of replacement debt
 (4) This Division does not apply to termination of the replacement debt referred to in paragraph (1)(b).

Limit on deductions
 (5) The total amounts deducted under section 243‑45 in respect of the original debt, or under this section in respect of the replacement debt, cannot exceed the sum of:
 (a) any amounts included in the debtor's assessable income under this Division in respect of the original debt; and
 (b) any amount by which deductions in respect of the original debt were reduced under section 243‑55.

243‑55  Effect of Division on later capital allowance deductions
 (1) This section applies where this Division (other than section 243‑65) has applied in relation to a debt and the debtor is entitled to a *capital allowance deduction in respect of the expenditure or the *financed property in relation to a time or period after the termination of the debt.
 (2) The *capital allowance deduction is reduced if the amount that would have been worked out under subsection 243‑35(2) would have exceeded the amount worked out under subsection 243‑35(4) if the following assumptions were applied in both subsections:

      Assumptions to be applied
         (1) That the debt was terminated at the time, or at the end of the period, referred to in subsection (1) of this section.
         (2) That the amount unpaid at the time, or at the end of the period, is reduced by any amounts paid under a replacement debt.
         (3) The debtor's *capital allowance deductions in respect of the expenditure or the *financed property were increased by the amount of the capital allowance deduction referred to in subsection (1) of this section.
 (3) The deduction is to be reduced by the amount of the excess.

243‑57  Effect of Division on later capital allowance balancing adjustments
 (1) This section applies where this Division (other than section 243‑65) has applied in relation to a debt and an amount is later included in the assessable income of an entity by virtue of a provision of this Act (other than this Division) as a result of the disposal of the *financed property the effect of which is to reverse a deduction covered by Step 1 in subsection 243‑35(2).
 (2) Any amount that would be included in the debtor's assessable income is reduced if the amount that would have been worked out under subsection 243‑35(4) would have exceeded the amount worked out under subsection