Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p23
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 23/35)
Character Range: 4115665–4118416

the property.
 (2) If the debt agreement is a notional loan arising under Division 240 (about arrangements treated as a sale and loan), the property that is the subject of the agreement is the financed property.
 (3) Property is the debt property if:
 (a) it is the *financed property; or
 (b) the property is provided as security for the debt.

Subdivision 243‑B—Working out the excessive deductions

Table of sections

Operative provisions
243‑35 Working out the excessive deductions

Operative provisions

243‑35  Working out the excessive deductions
 (1) The *capital allowance deductions have been excessive having regard to the amount of the debt that remains unpaid if the amount worked out under subsection (2) exceeds the amount worked out under subsection (4).
 (2) This is how to work out the total net *capital allowance deductions:

      Working out the total net capital allowance deductions
           Step 1. Add up all of the debtor's *capital allowance deductions in respect of the expenditure or the *financed property (including deductions because of balancing adjustments) for the income year in which the termination occurs or an earlier income year.
                  Note: The amount of a capital allowance deduction may be reduced under section 707‑415.
           Step 2. Deduct from that any amount that is included in the assessable income of the debtor of any income year by virtue of a provision of this Act (other than this Division) as a result of the disposal of the *financed property the effect of which is to reverse a deduction covered by Step 1.
           Step 3. Deduct from the result an amount equal to the sum of any amounts included in the entity's assessable income as a result of an earlier application of this Division to the debt.
           Step 4. Add to the result an amount equal to the sum of any deductions to which the entity is entitled under section 243‑45 (repayments of the original debt after termination) or 243‑50 (repayments of the replacement debt) because of payments in respect of the debt.
 (3) The reference in step 2 of the method statement in subsection (2) to an amount that is included in the assessable income of a taxpayer as a result of the disposal of the *financed property includes a reference to an amount that is included under section 26AG of the Income Tax Assessment Act 1936 as a result of the disposal of the financed property.
Note: Division 20 deals with amounts included to reverse the effect of past deductions.
 (4) This is how to work out the total net capital allowance deductions that would otherwise be allowable taking into account the amount of the debt that is unpaid:

      Working out the total net capital allowance deductions that would otherwise