Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 8/35)
Character Range: 4079814–4082586

or payable to the *notional seller under the *arrangement; and
 (b) any termination amounts paid or payable to the notional seller;
exceeds the amount worked out using the formula in subsection (4), the excess is included in the notional seller's assessable income of the income year in which the arrangement ends.
Note: Subsection 240‑80(5) provides that the amount of a notional loan that is taken to be made by an extended or renewed arrangement is a termination amount paid under the previous arrangement.
 (3) If the amount worked out using the formula in subsection (4) exceeds:
 (a) all amounts (other than *termination amounts) that were paid or payable to the *notional seller under the *arrangement; and
 (b) any termination amounts paid or payable to the notional seller;
the notional seller is entitled to deduct the excess in the income year in which the arrangement ends.
Note: Subsection 240‑80(5) provides that the amount of a notional loan that is taken to be made by an extended or renewed arrangement is a termination amount paid under the previous arrangement.
 (4) The formula for the purposes of subsections (2) and (3) is:

where:
assessed notional interest means the *notional interest that has been or is to be included in the *notional seller's assessable income of any income year.

240‑110  Adjustments for notional buyer
 (1) If:
 (a) an amount is included in the *notional seller's assessable income of an income year under subsection 240‑105(2); or
 (b) an amount would have been so included if the notional seller had been subject to tax on assessable income;
the *notional buyer is entitled to deduct a corresponding amount in the notional buyer's income year.
 (2) If:
 (a) the *notional seller is entitled to deduct an amount for an income year under subsection 240‑105(3); or
 (b) the notional seller would have been so entitled if the *notional seller had been subject to tax on assessable income;
a corresponding amount is included in the notional buyer's assessable income for the notional buyer's income year.
 (3) The *notional buyer is entitled to a deduction, and is required to include an amount in his or her assessable income only to the extent (if any) that the notional buyer would, apart from this Division, have been entitled to deduct *arrangement payments if no part of those payments were capital in nature.

Subdivision 240‑H—Application of Division 16E to certain arrangements

240‑112  Division 16E applies to certain arrangements
 (1) Division 16E of Part III of the Income Tax Assessment Act 1936 applies in relation to an arrangement (the assignment arrangement) between the notional seller and another person (the holder) to transfer the right to payments (the Division 240 payments) under an arrangement that is