Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p34
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 34/35)
Character Range: 3293221–3295953

a tax benefit because of bad debt deduction available to company
 (1) The Commissioner may disallow some or all of the deduction if:
 (a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and
 (b) the scheme would not have been entered into or carried out if the debt had not been incurred and the debt (or the relevant part of the debt) had not been written off (or able to be written off) as bad.
 (2) However, the Commissioner cannot disallow any of the deduction if:
 (a) the person had a *shareholding interest in the company at some time during the income year; and
 (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note: Section 175‑100 allows the Commissioner to disallow some or all of a deduction of an insolvent company.
 (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936.

Subdivision 175‑D—Common rules

Table of sections
175‑95 When a person has a shareholding interest in the company
175‑100 Commissioner may disallow excluded losses etc. of insolvent companies

175‑95  When a person has a shareholding interest in the company
 (1) A person has a shareholding interest in the company if the person is:
 (a) the beneficial owner; or
 (b) the trustee of a *family trust who is the owner;
of:
 (c) *shares in the company; or
 (d) an interest in *shares in the company.
 (2) A person also has a shareholding interest in the company if:
 (a) the person has a shareholding interest in another company; and
 (b) the other company has a shareholding interest in the company (including one resulting from any other application or applications of this subsection).

175‑100  Commissioner may disallow excluded losses etc. of insolvent companies
  Despite a subsection listed in column 1, the Commissioner may, under a subsection listed in column 2, disallow some or all of an *excluded loss, deduction, or *capital loss, of a company (as the case requires) if:
 (a) the company is or becomes:
 (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001; or
 (ii) an entity with a similar status under a *foreign law to a Chapter 5 body corporate; and
 (b) the company is insolvent (within the meaning of section 9 of the Corporations Act 2001) when the company becomes an entity mentioned in subparagraph (a)(i) or (ii).

Commissioner may disallow excluded losses etc. for insolvent companies
Item                                                                    Column 1                    Column 2
                                                                        Despite this subsection...  the Commissioner may disallow under this subsection: