Document ID: chunk:federal_register_of_legislation:C2025C00014:schedule:2f:p18
Version: federal_register_of_legislation:C2025C00014
Segment Type: schedule
Provision Reference: sch 2F (pt 18/79)
Character Range: 2251693–2254191

the condition in subsection 267‑30(2) (if applicable); and
• the condition in section 267‑35; and
• the condition in subsection 267‑40(2) (if applicable); and
• the condition in section 267‑45.

267‑25  Non‑fixed trust may be denied debt deduction

Type of trust to which this section applies
 (1) This section applies to a trust that:
 (a) can deduct in the income year an amount:
 (i) under section 51 or 63, or under section 8‑1 or 25‑35 of the Income Tax Assessment Act 1997, in respect of the writing off of the whole or part of a debt, incurred in an earlier income year, as bad; or
 (ii) under subsection 63E(3) or (4) in respect of a debt/equity swap relating to the whole or part of a debt incurred in an earlier income year; and
 (b) was a non‑fixed trust at any time in the period (the test period) beginning on the day the debt was incurred and ending at the end of the income year; and
 (c) was not an excepted trust at all times in the test period.
Note: Subdivisions 709‑D and 719‑I of the Income Tax Assessment Act 1997 also affect when a trust that used to be a member of a consolidated group or MEC group may deduct a debt that used to be owed to a member of the group and that the trust writes off as bad.

Condition for deducting amount
 (2) The trust cannot deduct the amount unless it meets:
• the condition in subsection 267‑30(2) (if applicable); and
• the condition in section 267‑35; and
• the condition in subsection 267‑40(2) (if applicable); and
• the condition in section 267‑45.

267‑30  If certain distributions are made, the trust must pass the pattern of distributions test

When trust must meet the condition
 (1) If either or both of the following happened, the trust must meet the condition in subsection (2):
 (a) the trust distributed income:
 (i) in the income year or within 2 months after its end; and
 (ii) in at least one of the 6 earlier income years; or
 (b) the trust distributed capital:
 (i) in the income year or within 2 months after its end; and
 (ii) in at least one of the 6 earlier income years.

The condition
 (2) The condition is that the trust must pass the pattern of distributions test for the income year.
To find out whether the trust passes the pattern of distributions test for the income year: see Subdivision 269‑D.

267‑35  The trust must not have previously failed to meet the condition in subsection 267‑30(2)
  The trust must not have been prevented from deducting the tax loss in an earlier income year because of a failure to