Limited recourse debt arrangements

If construction expenditure is financed in whole or in part by a limited recourse debt arrangement that ends after 27 February 1998 and part of the principal debt remains unpaid at the time it ends, an adjustment to assessable income is required. The adjustment is equal to the excess of the total amount of the capital works deductions allowed over the total amount that would have been deductible if based on actual outlays. If you are not sure how to work out your adjustment to assessable income, contact your professional adviser or the ATO.