Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 4/5)
Character Range: 6067946–6070376

entity that is a *member of a *consolidated group to an entity that is not a member of that group; or
 (b) from an entity that is not a member of a consolidated group to an entity that is a member of a consolidated group; or
 (c) from an entity that is a member of a consolidated group to an entity that is a member of another consolidated group.
This subsection has effect despite subsections (1) and (2).
Note: There is not an assignment of a debt from one entity to another merely because section 701‑1 (Single entity rule) starts or ceases to apply in relation to the entities so that the debt ceases to be a debt owed to one entity and becomes a debt owed to the other entity.

709‑210  Object of this Subdivision
  The main object of this Subdivision is to ensure that the claimant can deduct the debt, or part of it, only if each entity that was owed the debt for a debt test period could have deducted the debt if it had been written off as bad at the end of the period.

Limit on deduction of bad debt

709‑215  Limit on deduction of bad debt
 (1) The claimant can deduct the debt, or part of the debt, if, and only if:
 (a) section 8‑1 or 25‑35 permits the deduction (ignoring subsection 25‑35(5) and the provisions mentioned in that subsection); and
 (b) the condition in subsection (2) is met for each debt test period.
 (2) The condition is that the entity that was owed the debt for the debt test period could have deducted the debt for an income year (the debt test income year) starting and ending at the times identified in subsection (3) if:
 (a) the entity had written off the debt as bad at the end of the period; and
 (b) these provisions (the modified provisions) had effect as described in this section:
 (i) sections 165‑123 and 165‑126 (which are about conditions that must be met for a company to be able to deduct a bad debt);
 (ii) sections 266‑35, 266‑85, 266‑120, 266‑160 and 267‑25 in Schedule 2F to the Income Tax Assessment Act 1936 (which are about conditions that must be met for certain kinds of trusts to be able to deduct a bad debt);
 (iii) other provisions of this Act so far as they relate to a section listed in subparagraph (i) or (ii); and
 (c) these provisions did not apply:
 (i) subsections 165‑120(2) and (3);
 (ii) section 63G of the Income Tax Assessment Act 1936;
 (iii) section 267‑65 in Schedule 2F to that Act.
Note 1: Some of the other provisions of this Act that relate to a