Document ID: chunk:federal_register_of_legislation:C2004C01257:clause:2_1:p3
Version: federal_register_of_legislation:C2004C01257
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 3/20)
Character Range: 15208–18117

income

Notional interest

 (1) The *notional seller's assessable income of an income year includes the *notional interest for *arrangement payment periods, and parts of arrangement payment periods, in the income year.

Profit on notional sale

 (2) If the property is not *trading stock of the *notional seller and the consideration for the notional sale of the property exceeds the cost of the acquisition of the property by the notional seller, the excess is included in the notional seller's assessable income of the income year of the notional sale.

Profit on actual sale after notional re‑acquisition

 (3) If:
 (a) the *notional seller is taken under this Division to have re‑acquired the property from the *notional buyer; and
 (b) the notional seller afterwards sells the property; and
 (c) the consideration for the sale exceeds the cost of the re‑acquisition;
the excess is included in the notional seller's assessable income of the income year in which the sale occurred.

240‑40  Arrangement payments not to be included in notional seller's assessable income

 (1) The *arrangement payments that the *notional seller receives, or is entitled to receive, under the *arrangement:
 (a) are not to be included in the *notional seller's assessable income of any income year; but
 (b) are not taken to be *exempt income of the notional seller.

 (2) However, those *arrangement payments are taken into account in calculating *notional interest that is included in the *notional seller's assessable income under section 240‑35.

 (3) A loss or outgoing incurred by the *notional seller in deriving any such *arrangement payments is not taken to be a loss or outgoing incurred by the notional seller in relation to gaining or producing *exempt income.

Subdivision 240‑D—Deductions allowable to notional buyer

Guide to Subdivision 240‑D

240‑45  What this Subdivision is about

This Subdivision provides that the notional buyer may, in certain circumstances, be entitled to deductions for the notional interest for the notional loan that the notional seller is taken to have made to the notional buyer.

Table of sections

Operative provisions

240‑50 Extent to which deductions are allowable to notional buyer
240‑55 Arrangement payments not to be allowable deductions

[This is the end of the Guide]

Operative provisions

240‑50  Extent to which deductions are allowable to notional buyer

 (1) The *notional buyer is only entitled to deduct *notional interest for an income year to the extent that the notional buyer would, apart from this Division, have been entitled to deduct *arrangement payments for that income year if no part of those payments were capital in nature.

 (2) The *notional buyer is entitled to deduct *notional interest for *arrangement payment periods, and parts of arrangement payment periods, in the income year.

240‑55  Arrangement payments not to be allowable