Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-AA - Thin capitalisation rules for general class investors  

Operative provisions

SECTION 820-59   When FRT disallowed amount is treated as zero for companies and trusts  

820-59(1)    
This section applies if an entity is a company or a trust.

820-59(2)    
This section applies for the purposes of applying a * FRT disallowed amount of the entity for an income year (the disallowance year ) under paragraph 820-56(2)(b) , in order to work out the amount of a deduction from its assessable income for another income year (the deduction year ) under subsection 820-56(1) .

820-59(3)    
Despite section 820-57 , treat the * FRT disallowed amount for the disallowance year as being zero unless:

(a)    if the entity is a company - subsection (4) applies; or

(b)    if the entity is a trust - subsection (5) applies.

Rules for companies

820-59(4)    
This subsection applies if, assuming that:

(a)    the * FRT disallowed amount were a * tax loss; and

(b)    the disallowance year were the * loss year; and

(c)    the following provisions were disregarded:

(i) subsection 165-115B(3) ;

(ii) subsection 165-115BA(5) ;

(iii) section 415-35 ;

Divisions 165 , 166 and 167 would not prevent the company from deducting the entire amount of that tax loss in the deduction year.

Rules for trusts

820-59(5)    
This subsection applies if, assuming that:

(a)    the * FRT disallowed amount were a tax loss (within the meaning of Schedule 2F to the Income Tax Assessment Act 1936 ); and

(b)    the disallowance year were a loss year (within the meaning of that Schedule);

that Schedule would not prevent the entity from deducting the entire amount of that tax loss in the deduction year.