Document ID: chunk:federal_register_of_legislation:C2004C01257:clause:2_1:p16
Version: federal_register_of_legislation:C2004C01257
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 16/20)
Character Range: 47297–50053

income
243‑45 Deduction for later payments in respect of debt
243‑50 Deduction for payments for replacement debt
243‑55 Effect of Division on later capital allowance deductions
243‑57 Effect of Division on later capital allowance balancing adjustments
243‑58 Adjustment where debt only partially used for expenditure

Operative provisions

243‑40  Amount included in debtor's assessable income

  The debtor's assessable income for the income year in which the termination occurs is to include the excess referred to in subsection 243‑35(1).

Note: Section 243‑60 applies in relation to certain partnership debts.

243‑45  Deduction for later payments in respect of debt

 (1) This section applies if:
 (a) an amount was included in the debtor's assessable income under section 243‑40 or a deduction was reduced under section 243‑55; and
 (b) the debtor makes a payment to the creditor, after the termination of the debt arrangement, in respect of the debt (other than an amount to the extent to which it is a payment of interest, of *notional interest or in the nature of interest).

 (2) This is how to work out the amount of the deduction:

Working out the amount of the deduction

Step 1. Work out the amount that would be worked out under subsection 243‑35(2) if the debt were terminated immediately before the payment.

Step 2. Work out the amount that would have been worked out under subsection 243‑35(4) at that time if the payment had been taken into account.

Step 3. The amount of the deduction is the amount (if any) by which the amount worked out under Step 2 exceeds the amount worked out under Step 1.

 (3) The amount can be deducted for the income year in which the payment is made.

Limit on deductions

 (4) The total amounts deducted under this section in respect of a debt, and under section 243‑50 in respect of a replacement debt, cannot exceed the sum of:
 (a) any amounts included in the debtor's assessable income under this Division in respect of the original debt; and
 (b) any amount by which deductions in respect of the original debt were reduced under section 243‑55.

243‑50  Deduction for payments for replacement debt

Payments where debt refinanced

 (1) This section applies if:
 (a) an amount was included in the debtor's assessable income under section 243‑40 or a deduction was reduced under section 243‑55; and
 (b) an amount funded by a *non‑arm's length limited recourse debt (the replacement debt) was disregarded in calculations under subsection 243‑35(4); and
 (c) the debtor makes a payment, after the termination of the original debt arrangement, in respect of the replacement debt (other than to the extent to which it is a payment of interest, of *notional interest or in the nature of interest).