Document ID: chunk:federal_register_of_legislation:F2015L00068:front:0:p56
Version: federal_register_of_legislation:F2015L00068
Segment Type: other
Provision Reference: 
Character Range: 142742–145327

and
 (ii) standard commercial interest rates at the time that the loan was made; and
 (iii) the kind of business carried on, or the way in which assessable income is gained or produced by the business.

 (3) The amount by which the interest paid, referred to in paragraph (1) (c) or (2) (c), is greater than the reasonable rate of interest referred to in that paragraph, is an ineligible part of the relevant allowable deduction.

8 Trading stock of business — election under s 70-45 of ITAA 1997

 (1) For subsection 52ZZO (5) of the Act, this section applies if:
 (a) a company or trust values trading stock of a business owned or controlled by the company or trust using:
 (i) a valuation method at the start of an income year, giving an amount (the first valuation); and
 (ii) a different valuation method in accordance with an election made under section 70-45 of the ITAA 1997 at the end of the income year, giving an amount (the second valuation); and
 (b) the first valuation exceeds the second valuation; and
 (c) the ordinary income of the company or trust from the business is reduced by the amount of any excess of the first valuation over the second valuation (the allowable deduction); and
 (d) the allowable deduction exceeds the difference (if any) in the value of the trading stock if its value at the end of the income year were worked out by using the same valuation method used for the first valuation.

 (2) The amount by which the allowable deduction, referred to in paragraph (1) (c), is greater than the difference in the value of the trading stock, referred to in paragraph (1) (d), is an ineligible part of the allowable deduction.

9 Trading stock of primary production enterprise — election under s 70-45 of ITAA 1997

 (1) For subsection 52ZZZO (5) of the Act, this section applies if:
 (a) an entity carrying on a primary production enterprise values trading stock of the enterprise using:
 (i) a valuation method at the start of an income year, giving an amount (the first valuation); and
 (ii) a different valuation method in accordance with an election made under section 70-45 of the ITAA 1997 at the end of the income year, giving an amount (the second valuation); and
 (b) the first valuation exceeds the second valuation; and
 (c) the entity's income from the enterprise is reduced by the amount of any excess of the first valuation over the second valuation (the allowable deduction); and
 (d) the allowable deduction exceeds the difference (if any) in the value of the trading stock if its value at the end of the income year were worked out by