Document ID: chunk:federal_register_of_legislation:C2025C00014:section:159gk:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 159GK (pt 1/3)
Character Range: 1391473–1394241

159GK  Effect of application of Division on assessability of arrangement payments
 (1) Where this Division applies in relation to an item of eligible property in relation to which there is an assessable arrangement payment or assessable arrangement payments in relation to a taxpayer in respect of the application period, there shall be included in the assessable income of the taxpayer so much only of any payment portion of each assessable arrangement payment in relation to an eligible amount as does not exceed the interest amount (if any) in relation to the payment portion.
 (2) For the purposes of subsection (1), a reference to the interest amount in relation to a payment portion of an assessable arrangement payment in relation to an eligible amount is a reference to the amount (if any) ascertained in accordance with the formula A (1 + B)t – A, where:
A  is the eligible principal in relation to the payment portion;
B  is:
 (a) where the sum of the payment portions of the likely arrangement payments in relation to the eligible amount in respect of the likely application period (including any notional final payment portion of an arrangement payment) exceeds the residual amount, as ascertained at the commencement of the application period, in relation to the eligible amount—the fraction that is the effective annual interest rate, ascertained at the commencement of the application period referred to in subsection (1), at which the sum of the present values of the payment portions equals the residual amount; and
 (b) in any other case—nil; and
t  is the number of whole days in the arrangement payment period divided by 365.
 (3) For the purposes of subsection (2):
 (a) a reference in that subsection to the eligible principal in relation to a payment portion of an arrangement payment in relation to an eligible amount is a reference to:
 (i) where the arrangement payment is the first arrangement payment in the likely application period referred to in that subsection—the residual amount in relation to the eligible amount, as ascertained at the commencement of the arrangement payment period in relation to the arrangement payment; and
 (ii) in the case of any other arrangement payment—an amount ascertained in accordance with the formula A ‑ B  +  C, where:
  A  is the eligible principal in relation to the payment portion of the immediately preceding arrangement payment;
  B  is the amount of the payment portion of the immediately preceding arrangement payment; and
  C  is the interest amount in relation to the payment portion of the immediately preceding arrangement payment; and
 (b) a reference in that subsection to the arrangement payment period in relation to an arrangement payment is a reference to:
 (i) where the arrangement