Document ID: chunk:federal_register_of_legislation:C2024A00023:clause:2_76:p2
Version: federal_register_of_legislation:C2024A00023
Segment Type: clause
Provision Reference: sch 2 cl 76 (pt 2/12)
Character Range: 74075–76838

disposers (each of which is an associate disposer) is an *associate pair of the acquirer;
 (c) the entity mentioned in subsection (1) (the relevant entity) is:
 (i) the acquirer; or
 (ii) an associate pair of the acquirer; or
 (iii) an associate pair of an associate disposer;
 (d) the relevant entity's *debt deduction mentioned in subsection (1) is, wholly or partly, in relation to any of the following:
 (i) the acquisition mentioned in paragraph (a) of this subsection;
 (ii) the acquirer's holding of the CGT asset, or legal or equitable obligation;
 (e) the relevant entity's debt deduction mentioned in subsection (1) is referable to an amount paid or payable, either directly or indirectly, to any of the following:
 (i) an associate pair of the relevant entity;
 (ii) an associate pair of the acquirer;
 (iii) an associate pair of an associate disposer;
 (f) the acquisition mentioned in paragraph (a) of this subsection is not covered by section 820‑423AA (which is about exceptions);
 (g) the relevant entity has not made a choice under subsection 820‑46(4) to use the third party debt test for the income year mentioned in subsection (1) of this section.
 (3) To avoid doubt, subsection (2) may apply more than once in relation to the *acquisition of a *CGT asset, or a legal or equitable obligation.
 (3A) For the purposes of subsection (2):
 (a) that subsection may apply in relation to an indirect *acquisition by an entity through one or more interposed entities even if an acquisition in the series is covered by section 820‑423AA (which is about exceptions); and
 (b) in determining whether an acquisition occurs indirectly through one or more interposed entities:
 (i) it is sufficient if acquisitions exist between each entity; and
 (ii) it is not necessary to demonstrate that each acquisition in a series of acquisitions happened before the next acquisition.
Example: Entity A acquires a membership interest in Entity B that is covered by the exception in subsection 820‑423AA(1). Entity B later acquires, from Entity C, a CGT asset that is not covered by an exception in that section. There may be an indirect acquisition of the CGT asset by Entity A.
 (4) For the purposes of subsections (2), (3) and (3A), disregard paragraph (b) of the definition of "acquire" in subsection 995‑1(1).

Financial arrangements involving associate pairs
 (5) This subsection applies if all of the following conditions are satisfied:
 (a) an entity (the payer) enters into, or has a *financial arrangement with another entity;
 (b) the payer uses the financial arrangement to:
 (i) fund; or
 (ii) facilitate the funding of;
  one or more payments or distributions, of which one or more is a payment or distribution that, to an extent:
 (iii) the payer makes