Tax Laws Amendment (2010 Measures No. 2) Act 2010 (75 of 2010)

Schedule 1   Distributions to entities connected with a private company

Income Tax Assessment Act 1936

15   Subsection 109R(2)

Repeal the subsection, substitute:

(2) A payment must not be taken into account if:

(a) a reasonable person would conclude (having regard to all the circumstances) that, when the payment was made, the entity intended to obtain a loan or loans from the private company of a total amount similar to, or larger than, the payment; or

(b) both of the following subparagraphs apply:

(i) the entity obtained, before the payment was made, a loan or loans from the private company of a total amount similar to, or larger than, the amount of the payment;

(ii) a reasonable person would conclude (having regard to all the circumstances) that the entity obtained the loan or loans in order to make the payment.