Product Ruling
PR 2020/5A1 - Addendum
Income tax: UBS Structured Option and Loan Facility
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Addendum
This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953. It amends Product Ruling PR 2020/5 to incorporate the application of subsections 82KZM(1A) and 82KZMA(2A) of the Income Tax Assessment Act 1936.
PR 2020/5 is amended as follows:
In subparagraph (i), omit 'for the year of income'; substitute ', or an entity covered by subsection 82KZMA(2A) of the ITAA 1936,'.
At the end of the second dot point omit ', and', substitute 'and updated on 29 September 2021, and'.
After the words 'whether the investor is a small', insert 'or medium'.
(a) Omit the heading; substitute 'Section 82KZM – prepaid expenditure incurred by certain small and medium business entities and individuals incurring non-business expenditure'.
(b) Omit the wording of the first dot point; substitute:
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- a small business entity, or an entity covered by subsection 82KZM(1A) of the ITAA 19363, for the year of income that has not chosen to apply section 82KZMD of the ITAA 1936 to the expenditure, or
(c) After 'ITAA 1936' in the first dot point, insert new footnote 3:
3 An entity is covered by subsection 82KZM(1A) of the ITAA 1936 for the expenditure year if the entity is not a small business entity for that year but would be a small business entity for that year if each reference in section 328-110 to $10 million (as noted in paragraph 33 of this Product Ruling) were instead a reference to $50 million.
Omit the wording of the paragraph; substitute:
As the eligible service period in relation to the deductible Interest payment under the Principal Loan and Supplementary Loan is not more than 12 months and does not end after the last day of the year of income after the one in which the expenditure was incurred, section 82KZM of the ITAA 1936 will have no application to investors referred to in paragraph 39 of this Product Ruling. Such investors will be able to claim an immediate deduction allowable under section 8-1 for the Interest incurred under the Principal Loan and Supplementary Loan.
(a) Omit the heading; substitute 'Sections 82KZMA and 82KZMD – prepaid non-business expenditure incurred by non-individual and non-small and medium business entities'.
(b) Omit the wording of the paragraph; substitute:
Sections 82KZMA and 82KZMD of the ITAA 1936 set the amount and timing of deductions for expenditure incurred by an investor (other than a small business entity or an entity covered by subsection 82KZMA(2A) of the ITAA 19364, for the year of income that has not chosen to apply section 82KZMD to the expenditure) that is not an individual and does not incur the expenditure in carrying on a business.
(c) After 'ITAA 1936', insert new footnote 4:
4 An entity is covered by subsection 82KZMA(2A) of the ITAA 1936 for the expenditure year if the entity is not a small business entity for that year but would be a small business entity for that year if each reference in section 328-110 to $10 million (as noted in paragraph 33 of this Product Ruling) were instead a reference to $50 million.
7. Appendix 2 – Detailed contents list
Omit:
| Section 82KZM – prepaid expenditure incurred by certain small business entities and individuals incurring non-business expenditure | 39 |
| Sections 82KZMA and 82KZMD – prepaid non-business expenditure incurred by non-individual and non-small business entities | 42 |
Substitute:
| Section 82KZM – prepaid expenditure incurred by certain small and medium business entities and individuals incurring non-business expenditure | 39 |
| Sections 82KZMA and 82KZMD – prepaid non-business expenditure incurred by non-individual and non-small and medium business entities | 42 |
This Addendum applies before and after the date of issue.
Commissioner of Taxation
30 August 2023
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References
ATO references:
NO 1-YWHT4XY