Taxation Ruling

TR 93/16A - Addendum

Income tax: application of the 'Rule of 78' or other methods in calculating the interest component of instalments paid under a fixed term loan or extended credit transaction

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FOI status:

may be released

Addendum

This Addendum amends Taxation Ruling TR 93/16 to clarify that the 'Rule of 78' method cannot be used for transactions to which Division 240 of the Income Tax Assessment Act 1997 applies. Division 240 applies to arrangements entered into after 27 February 1998.

Taxation Ruling TR 93/16 is amended as follows:

Paragraph 8

Delete full stop at the end of the fifth dash point and replace with '; and'.

Insert a sixth dash point:

-

transactions to which Division 240 of the Income Tax Assessment Act 1997 applies. (An example of a Division 240 calculation can be found in the Explanatory Memorandum to Taxation Laws Amendment Bill No.1 2001).

Commissioner of Taxation
7 July 2004

References

ATO references:
NO 2003/11684