Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 175 - Use of a company ' s tax losses or deductions to avoid income tax  

Subdivision 175-C - Tax benefits from unused bad debt deductions  

SECTION 175-90   Second case: someone else obtains a tax benefit because of bad debt deduction available to company  

175-90(1)    
The Commissioner may disallow some or all of the deduction if:

(a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and

(b) the scheme would not have been entered into or carried out if the debt had not been incurred and the debt (or the relevant part of the debt) had not been written off (or able to be written off) as bad.

175-90(2)    
However, the Commissioner cannot disallow any of the deduction if:

(a) the person had a *shareholding interest in the company at some time during the income year; and

(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.

Note:

Section 175-100 allows the Commissioner to disallow some or all of a deduction of an insolvent company.

175-90(3)    
An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .