Tax Laws Amendment (2007 Measures No. 3) Act 2007 (79 of 2007)

Schedule 1   Distributions to entities connected with a private company and related issues

Part 1   Main amendments

Income Tax Assessment Act 1936

10   After subsection 109N(3)

Insert:

(3A) Reduce the maximum term under paragraph (3)(a) for a loan (the new loan ) in accordance with subsection (3B) if:

(a) the new loan results from the refinancing of another loan (the old loan ); and

(b) the maximum term of the old loan under subsection (3) was 7 years; and

(c) the maximum term of the new loan under subsection (3) is 25 years (disregarding this subsection).

(3B) The amount of the reduction is equal to the length of the period:

(a) starting when the old loan was made; and

(b) ending when the old loan was refinanced.

(3C) Reduce the maximum term under paragraph (3)(b) for a loan (the new loan ) in accordance with subsection (3D) if:

(a) the new loan results from the refinancing of another loan (the old loan ); and

(b) the maximum term of the old loan under subsection (3) was 25 years; and

(c) the maximum term of the new loan under subsection (3) is 7 years (disregarding this subsection); and

(d) the length of the period:

(i) starting when the old loan was made; and

(ii) ending when the old loan was refinanced;

exceeds 18 years.

(3D) The amount of the reduction is the excess mentioned in paragraph (3C)(d).