INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 16G - Debt creation involving non-residents  

Subdivision C - Reduction of interest deductions  

SECTION 159GZZF   SECTION 159GZZE NOT TO APPLY IN CERTAIN CASES  

159GZZF(1)    
Section 159GZZE does not apply to the acquisition of an asset if:

(a) the asset is cash; and

(b) the acquisition was not, and was not part of, the acquisition of a business or of part of a business.

159GZZF(2)    
Section 159GZZE does not apply to the acquisition of an asset if:

(a) immediately before the acquisition, the asset was trading stock of the eligible seller (or of all of the eligible sellers, as the case requires); and

(b) the acquisition was not, and was not part of, the acquisition of a business or of part of a business.

159GZZF(3)    
Section 159GZZE does not apply to the acquisition of an asset if the asset is a share in a company and had not previously been issued.

159GZZF(4)    
Section 159GZZE does not apply to the acquisition of an asset if:

(a) before the acquisition, the asset had not previously been used, held or applied by any person:

(i) for the purpose of gaining or producing assessable income; or

(ii) in carrying on a business for the purpose of gaining or producing assessable income; and

(b) the eligible seller (or each of the eligible sellers, as case requires) was a non-resident immediately before the acquisition.

159GZZF(4A)    
Subsection (4) does not apply to the acquisition of an asset if the asset is a share in a company that was a resident immediately before the acquisition.

159GZZF(5)    
Section 159GZZE does not apply to the acquisition of an asset if the Commissioner is satisfied that the acquisition has not, and will not, result directly or indirectly in:

(a) an increase in the overall indebtedness of the group constituted by:

(i) each affected taxpayer; and

(ii) the eligible seller (or each of the eligible sellers, as the case requires); or

(b) an increase in the ability of:

(i) the eligible seller (or any of the eligible sellers, as the case requires); or

(ii) any associate of the eligible seller (or of any of the eligible sellers, as the case requires);

to pay an amount (other than an amount assessable under section 44 or liable to tax under subsection 128B(4)) to:

(iii) a foreign controller of the eligible seller (or of any of the eligible sellers, as the case requires); or

(iv) an associate of a foreign controller of the eligible seller (or of any of the eligible sellers, as the case requires).

159GZZF(6)    
In this section:

'affected taxpayer'
, in relation to the acquisition of an asset, means a taxpayer to whom section 159GZZE would apply (apart from this section) in relation to the acquisition;

'eligible seller'
, in relation to the acquisition of an asset, means a person who is an eligible seller for the purposes of section 159GZZE in relation to that acquisition.