Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p19
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 19/35)
Character Range: 4106152–4108909

renewal (or further extension or renewal) otherwise results in substantial continuity of the leasing of the car to the lessee.

Division 243—Limited recourse debt

Table of Subdivisions
 Guide to Division 243
243‑A Circumstances in which Division operates
243‑B Working out the excessive deductions
243‑C Amounts included in assessable income and deductions
243‑D Special provisions

Guide to Division 243

243‑10  What this Division is about

      This Division tells you when you must include an additional amount in your assessable income at the termination of a limited recourse debt arrangement. It also tells you what the additional amount is.
      Basically, the Division applies where the capital allowance deductions that have been obtained for expenditure that is funded by the debt and the deductions are excessive having regard to the amount of the debt that was repaid.
      The reason for the adjustment is to ensure that, where you have not been fully at risk in relation to an amount of expenditure, you do not get a net deduction if you fail to pay that amount.

Subdivision 243‑A—Circumstances in which Division operates

Table of sections

Operative provisions
243‑15 When does this Division apply?
243‑20 What is limited recourse debt?
243‑25 When is a debt arrangement terminated?
243‑30 What is the financed property and the debt property?

Operative provisions

243‑15  When does this Division apply?
 (1) This Division applies if:
 (a) *limited recourse debt has been used to wholly or partly finance or refinance expenditure; and
 (b) at the time that the debt *arrangement is terminated, the debt has not been paid in full by the debtor; and
 (c) the debtor can deduct an amount as a *capital allowance for the income year in which the termination occurs, or has deducted or can deduct an amount for an earlier income year, in respect of the expenditure or the *financed property.
Note: This Division does not apply to certain limited recourse debts that are used to refinance limited recourse debt to which this Division has applied (see subsection 243‑50(4)).
 (2) However, unless the net *capital allowance deductions have been excessive having regard to the amount of the debt that remains unpaid (see section 243‑35), no amount is included in the debtor's assessable income under this Division although future deductions may be reduced.
 (3) In working out if the debt has been paid in full, and in working out the unpaid amount of the debt, the following amounts are to be treated as if they were not payments in respect of the debt:
 (a) any reduction in the debt as a result of the *financed property being surrendered or returned to the creditor at the termination of the debt;
 (b) any payment to reduce the debt that