Taxation Laws Amendment Act (No. 2) 1999 (93 of 1999)

Schedule 7   Distributions to beneficiaries and partners that are equivalent to interest

Income Tax Assessment Act 1936

9   At the end of section 160AQYA

Add:

(5) A taxpayer is not entitled to a rebate of tax under subsection (1) if:

(a) the partnership amount was paid:

(i) in respect of an interest in the trust or partnership that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

(6) In subsection (5):

commencing time means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid : a partnership amount is taken to have been paid to a taxpayer if it is included in, or is allowed as a deduction from, the taxpayer's assessable income.

(7) In determining whether the payment of the partnership amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.