INCOME TAX ASSESSMENT ACT 1997 (ARCHIVE)

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-F - Thin capitalisation rules for resident TC groups  

Operative provisions

SECTION 820-465 (ARCHIVE)  

820-465   Effect on entities in group if debt deduction disallowed  
If:

(a) this Division (as applying because of this Subdivision) disallows all or part of a *debt deduction of the group for an income year; and

(b) apart from this Division, the deduction would be a deduction of an entity for that income year;

this subsection disallows the deduction of that entity to the same extent.

Note 1:

This section does not disallow a debt deduction to the extent that, at the time when the entity incurred the cost, the amount of the cost was paid or owed to another entity that was in the group at that time.

This is because the cost would not be a deduction for the group, since both entities are treated as divisions or parts of the group (see subsection 820-460(3) ).

Note 2:

The disallowed amount also does not form part of the cost base of a CGT asset. See section 110-54 .