INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 67   EXPENSES OF BORROWING  

67(1AA)   [No application 1997/98 income year onwards]  

This section does not apply to expenditure incurred in the 1997-98 year of income or a later year of income.

Note:

Section 25-25 (Borrowing expenses) of the Income Tax Assessment Act 1997 deals with the deductibility of borrowing expenses.

67(1A)   [Commercial debt forgiveness]  

This section has effect subject to Division 245 of Schedule 2C .

67(1)   [Allowable deduction]  

Subject to this section, so much of the expenditure incurred by the taxpayer in borrowing money used by him for the purpose of producing assessable income as bears to the whole of that expenditure the same proportion as the part of the period for which the money was borrowed that is in the year of income bears to the whole of that period shall be an allowable deduction.

67(2)   [Period of borrowing]  

Where the period for which the money was borrowed is not fixed, or exceeds 5 years, the period of 5 years from the date on which the money was borrowed shall, for the purposes of subsection (1), be deemed to be the period for which the money was borrowed.

67(3)   [Expenditure not exceeding $100]  

Where the total expenditure incurred in the year of income by the taxpayer in borrowing money used by him for the purpose of producing assessable income does not exceed $100, the whole of that expenditure shall be an allowable deduction in the year of income.

67(4)   [Extent of allowable deduction]  

Where a taxpayer incurs expenditure in the year of income in borrowing money used by the taxpayer only partly for the purpose of producing assessable income, the taxpayer shall be deemed, for the purposes of the preceding provisions of this section, to have incurred only so much of that expenditure as, in the opinion of the Commissioner, is reasonable in the circumstances.