Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 1/6)
Character Range: 4150750–4153346

6                                    the debt is *forgiven by subscribing for *shares in a company as mentioned in section 245‑37                               the amount worked out using the formula in subsection (3).

 (2) The conditions for the purposes of item 3 of the table in subsection (1) are:
 (a) at least one of the following is satisfied:
 (i) at the time when the debt was *forgiven, the creditor was an Australian resident;
 (ii) the forgiveness of the debt was a *CGT event involving a *CGT asset that was *taxable Australian property; and
 (b) at least one of the following is satisfied:
 (i) there is no amount, and no property, covered by column 2 of item 2 of the table;
 (ii) the amount worked out under item 2 of the table is greater or less than the *market value of the debt at the time of the forgiveness and the debtor and creditor did not deal with each other at *arm's length in connection with the forgiveness.
 (3) The formula for the purposes of item 6 of the table in subsection (1) is:
where:
amount applied means the amount applied by the company as mentioned in section 245‑37.
amount subscribed means the amount subscribed as mentioned in section 245‑37.
market value of shares subscribed for means the *market value of all the shares in the company that were subscribed for as mentioned in section 245‑37, immediately after those shares were issued.

Working out the gross forgiven amount

245‑75  Gross forgiven amount of a debt
 (1) The gross forgiven amount of a debt is:
 (a) if section 245‑65 does not apply to the debt—the value of the debt when it was *forgiven (worked out under section 245‑55, 245‑60 or 245‑61); or
 (b) if the value of the debt when it was forgiven exceeds the amount offset under section 245‑65 in relation to the debt—the excess.
 (2) If the value of the debt when it was *forgiven is equal to or less than the amount offset:
 (a) there is no gross forgiven amount in respect of the debt; and
 (b) Subdivisions 245‑D to 245‑F (about how to work out the net forgiven amount of a debt and how to treat it) do not apply in respect of the debt.

245‑77  Gross forgiven amount shared between debtors
  If 2 or more entities were liable (except as partners in a partnership) to pay a debt, whether their liability was joint or several, or joint and several, this Subdivision applies as if each entity had a *gross forgiven amount worked out using the formula:

Subdivision 245‑D—Calculation of net forgiven amount of a debt

Guide to Subdivision 245‑D

245‑80  What this Subdivision is about

      The net forgiven amount of a debt is