Income Tax Assessment Act 1997
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Hide history noteSECTION 832-20 Losses that arise from payments or parts of payments 832-20(1)
This section applies if:
(a) a loss gives rise to:
(i) a deduction for an entity (the payer ) for an income year; or
(ii) a *foreign income tax deduction for an entity (also the payer ) for a *foreign tax period; and
(b) in working out the amount of the loss:
(i) all or a part of a payment made, or to be made, to one or more other entities is taken into account; or
(ii) 2 or more payments made, or to be made, to one or more other entities are taken into account.
Note:
This section also applies to losses from Division 230 financial arrangements: see section 832-780 .
Payments made to only one entity
832-20(2)
If, in working out the amount of the loss, a payment or payments made to only one entity (the recipient ) are taken into account, this Division applies as if:
(a) at the end of the income year or *foreign tax period identified in paragraph (1)(a), the payer made a payment to the recipient; and
(b) the amount of the payment was equal to the amount of the deduction or *foreign income tax deduction; and
(c) the payment gave rise to the deduction or foreign income tax deduction.
Payments made to 2 or more entities
832-20(3)
If, in working out the amount of the loss, a payment or payments made to 2 or more entities (each of which is a recipient ) are taken into account, this Division applies as if:
(a) at the end of the income year or *foreign tax period identified in paragraph (1)(a), the payer made a payment to each recipient; and
(b) the amount of each payment was equal to so much of the amount of the deduction or *foreign income tax deduction as is reasonable having regard to the amounts of the payments actually made to the recipients; and
(c) the payment gave rise to a deduction or foreign income tax deduction equal to the amount of the payment.
Working out whether the payment has been subject to tax
832-20(4)
In working out for the purposes of this Division the extent to which a payment that is taken by this section to have been made is *subject to Australian income tax or *subject to foreign income tax, regard is to be had to the actual payments made to the recipient.
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