Document ID: chunk:federal_register_of_legislation:C2005A00162:clause:3_1:p1
Version: federal_register_of_legislation:C2005A00162
Segment Type: clause
Provision Reference: sch 3 cl 1 (pt 1/4)
Character Range: 12155–14764

1  After Subdivision 719‑H
Insert:

Subdivision 719‑I—Bad debts

Guide to Subdivision 719‑I

719‑450  What this Subdivision is about

      The head company of a MEC group is taken to meet the conditions in section 165‑123 (about maintaining the same ownership in an ownership test period to be able to deduct a bad debt) if and only if the top company for the group at the start of the period meets those conditions for the period.

Table of sections

Maintaining the same ownership to be able to deduct bad debt

719‑455 Special test for deducting a bad debt because a company maintains the same owners
719‑460 Assumptions about nothing happening to affect direct and indirect ownership of the test company
719‑465 Assumptions about the test company failing to meet the conditions in section 165‑123

Maintaining the same ownership to be able to deduct bad debt

719‑455  Special test for deducting a bad debt because a company maintains the same owners

 (1) This section has effect for the purposes of working out whether the *head company of a *MEC group:
 (a) can deduct a debt it writes off as bad; or
 (b) could have deducted a debt as described in subsection 709‑215(2).

Note: Whether the head company of the MEC group could have deducted a debt as described in subsection 709‑215(2) is relevant under Subdivision 709‑D to:

(a) the question whether the head company can deduct the debt it writes off as bad, or the swap loss it makes in extinguishing the debt as part of a debt/equity swap, after the debt was owed to an entity while the entity was not a member of the MEC group; and

(b) the question whether an entity that was owed the debt after it was owed to the head company can deduct the amount of the debt the entity writes off as bad or the swap loss the entity makes in extinguishing the debt as part of a debt/equity swap.

 (2) The *head company is taken to meet the conditions in section 165‑123 (about the company maintaining the same owners) for the *ownership test period if and only if the company (the test company) that was the *top company for the *MEC group at the start of the same period would have met those conditions for that period on the assumptions in the following sections (if applicable):
 (a) section 719‑460 (which is about assuming that nothing happened in relation to certain things that would affect whether the test company would meet those conditions);
 (b) section 719‑465 (which is about assuming that the test company would have failed to meet those conditions in certain circumstances).

Note 1: Even though subsection (2) of this section raises the