Document ID: chunk:federal_register_of_legislation:C2025C00014:clause:2d_8:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: clause
Provision Reference: sch 2D cl 8 (pt 1/2)
Character Range: 2169253–2171923

8                  Subdivision 20‑A, so far as it applies to an amount that may be an assessable recoupment because a deduction has been allowed or is allowable under section 775‑30

 (6A) For the purposes of the application of subsection (5) to the transition taxpayer, a provision covered by item 7 or 8 of the table in subsection (6) is taken to have commenced at the start of the taxpayer's applicable commencement date (within the meaning of Division 775 of the Income Tax Assessment Act 1997).
Note: For applicable commencement date, see section 775‑155 of the Income Tax Assessment Act 1997.
 (6B) The rule in subsection (5) does not apply, and is taken never to have applied, to the transition taxpayer in relation to a provision covered by item 7 or 8 of the table in subsection (6) if the taxpayer makes an election under section 775‑150 of the Income Tax Assessment Act 1997.

Avoidance of doubt—debt write‑off
 (7) To avoid doubt, an effect of subsection (2) is that the sum of all allowable deductions (if any) in respect of the writing off as bad of the whole or part of a debt to which that subsection applies will not exceed the market value of the debt at the transition time.

Avoidance of doubt—disposal need not involve an alienation
 (8) To avoid doubt, an asset may be disposed of for the purposes of this section whether or not the disposal involves alienating the asset.

57‑30  Deemed cessation and re‑assumption of liabilities
 (1) Subject to subsection (3), for the purposes of determining a deduction allowable to, or an amount included in the assessable income of, the transition taxpayer after the transition time in respect of the satisfaction of a liability owed by the transition taxpayer immediately before the transition time, the transition taxpayer is taken:
 (a) to have ceased immediately before the transition time to have any liabilities; and
 (b) to have assumed each of its liabilities again at the transition time in return for consideration equal to the adjusted market value (see subsection (2)) at that time of the right or other asset, corresponding to the liability, that was held by the person to whom the liability was owed.
 (2) The adjusted market value of the corresponding right or other asset is the market value of that right or asset at the transition time:
 (a) reduced by any amount paid or that becomes payable by the transition taxpayer in respect of the liability at or after the transition time, where:
 (i) because of subsection 57‑20(2); or
 (ii) because all of the transition taxpayer's income was wholly exempt from income tax before the transition time;
  the amount is not an allowable deduction; and