Income Tax Assessment Act 1997
View history note
Hide history noteSECTION 820-415 820-415 Amount of debt deduction disallowed
The amount of *debt deduction disallowed under subsection 820-395(1) is worked out using the following formula:
| Debt deduction × |
Capital shortfall
Average debt |
where:
average debt
means the average value, for the income year, of all the *debt capital of the entity that gives rise to *debt deductions of the entity (other than *allowable OB deductions) for that or any other income year.
capital shortfall
means the amount by which the entity
'
s *average equity capital for that year (see subsection
820-395(3)
) is less than the entity
'
s *minimum capital amount for that year.
debt deduction
means each *debt deduction of the entity (other than *allowable OB deduction) for the income year.
Note:
The disallowed amount also does not form part of the cost base of a CGT asset. See section 110-54 .
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