Tax Law Improvement Act (No. 1) 1998 (46 of 1998)

3   Company bad debts

4   Consequential amendment of other Acts

Financial Corporations (Transfer of Assets and Liabilities) Act 1993

23   Subsection 22(4)

Repeal the subsection, substitute:

Limit on deductions for partly written-off debt

(4) If this Act applies to the transfer of a debt that has been partly written off, the maximum that the receiving corporation can deduct for the debt for one or more years of income under section 8-1 or 25-35 of the Income Tax Assessment Act 1997 is worked out using the formula:

Amount of the debt - Unrecouped deductions

where:

unrecouped deductions means the total of the amounts that the transferring corporation has deducted or can deduct for any year of income under:

(a) section 8-1 or 25-35 of the Income Tax Assessment Act 1997; or

(b) section 51 or 63 of the Income Tax Assessment Act 1936;

reduced by the total of any amounts included in its assessable income in respect of the debt under:

(c) Subdivision 20-A of the Income Tax Assessment Act 1997; or

(d) subsection 63(3) of the Income Tax Assessment Act 1936.