Document ID: chunk:federal_register_of_legislation:C2005A00162:clause:3_3
Version: federal_register_of_legislation:C2005A00162
Segment Type: clause
Provision Reference: sch 3 cl 3
Character Range: 19956–21276

3  At the end of Subdivision 709‑D
Add:

Extension of Subdivision to debt/equity swap loss

709‑220  Limit on deduction of swap loss

Object

 (1) The object of this section is to limit the circumstances in which an entity can deduct a swap loss (as defined in section 63E of the Income Tax Assessment Act 1936) resulting from a debt/equity swap (as defined in that section) to circumstances similar to those in which this Subdivision lets an entity deduct a debt it writes off as bad.

Modified operation of sections 709‑205, 709‑210 and 709‑215

 (2) Sections 709‑205, 709‑210 and 709‑215 (except subsection 709‑215(2)) apply in relation to the extinction (however described) of a debt as part of a debt/equity swap in the same way as they apply in relation to the writing off of a debt as bad.

 (3) Subsection 709‑215(1):
 (a) applies in relation to a swap loss from a debt/equity swap in the same way as it applies in relation to a debt, or part of a debt; and
 (b) applies as if paragraph 709‑215(1)(a) referred to subsection 63E(3) of the Income Tax Assessment Act 1936 instead of sections 8‑1 and 25‑35.

 (4) This section has effect despite subsection 63E(5) of the Income Tax Assessment Act 1936.

Division 3—Consequential amendments

Financial Corporations (Transfer of Assets and Liabilities) Act 1993