Income Tax Assessment Act 1936
View history note
Hide history noteA private company is not taken under this Division to pay a dividend because a debt owed to it by another company is forgiven.
Note:
This does not apply to a debt owed by a company as trustee. (See section 109ZE .)
109G(2) Forgiveness of debts under Bankruptcy Act not treated as dividends.A private company is not taken under this Division to pay a dividend because a debt is forgiven because the debtor becomes a bankrupt or because of Part X of the Bankruptcy Act 1966 .
109G(3) Forgiveness of loan debt does not give rise to dividend if loan gives rise to dividend under section 109D.A private company is not taken under section 109F to pay a dividend at the end of a year of income because of the forgiveness of an amount of a debt resulting from a loan if, because of the loan, the private company is taken:
(a) under section 109D to pay a dividend at the end of that year or an earlier one; or
(b) under former subsection 108(1) to pay a dividend on the last day of that year or an earlier one.
(a) a private company is taken under section 109F to pay a dividend at the end of a year of income because of the forgiveness of an amount of a debt resulting from a loan; and
(b) the private company is taken under section 109E to pay a dividend at the end of an earlier year of income in relation to the loan.
The amount of the dividend mentioned in paragraph (3A)(a) is reduced by the amount of the dividend mentioned in paragraph (3A)(b) (but not below zero).
Note:
There may be more than one reduction under this subsection if the private company has been taken under section 109E to pay more than one dividend in relation to the loan.
A private company is not taken under this Division to pay a dividend because of the forgiveness of a debt owed by an entity if the Commissioner is satisfied that:
(a) the debt was forgiven because payment of the debt would have caused the entity undue hardship; and
(b) when the entity incurred the debt, the entity had the capacity to pay the debt; and
(c) the entity lost the ability to pay the debt in the foreseeable future as a result of circumstances beyond the entity's control.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.
