Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The production of:
(a) a notice given under section 197 - 80; or
(b) a document that is signed by the Commissioner and appears to be a copy of such a notice;
is conclusive evidence that:
(c) the notice was duly given; and
(d) the amount of * untainting tax specified in the notice became due and payable by the company to which it was given on the day specified in the notice.
(2) Subsection (1) does not apply in proceedings under Part IVC of the Taxation Administration Act 1953 on a review or appeal relating to the review.
Income Tax Assessment Act 1997
No. 38, 1997
Compilation No. 254
Compilation date: 14 October 2024
Includes amendments: Act No. 38, 2024
This compilation is in 12 volumes
Volume 1: sections 1 - 1 to 36 12 pt">- 55
Volume 2: sections 40 - 1 to 67 - 30
Volume 3: sections 70 - 1 to 121 12 pt">- 35
Volume 4: sections 122 - 1 to 197 12 pt">- 85
Volume 5: sections 200 - 1 to 253 - 15
Volume 6: sections 275 - 1 to 313 12 pt">- 85
Volume 7: sections 315 - 1 to 420 - 70
Volume 8: sections 615 - 1 to 721 - 40
Volume 9: sections 723 - 1 to 880 12p t">- 205
Volume 10: sections 900 - 1 to 995 - 1
Volume 11: Endnotes 1 to 3
Volume 12: Endnote 4
Each volume has its own contents
This compilation
This is a compilation of the Income Tax Assessment Act 1997 that shows the text of the law as amended and in force on 14 October 2024 (the compilation date ).
The notes at the end of this compilation (the endnotes ) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.
Self - repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Chapter 3--Specialist liability rules
Part 3 - 6--The imputation system
Division 200--Guide to Part 3 - 6
Guide to Division 200
200 - 1 What this Division is about
200 - 5 The imputation system
200 - 10 Franking a distribution
200 - 15 The franking account
200 - 20 How a distribution is franked
200 - 25 A corporate tax entity must not give its members credit for more tax than the entity has paid
200 - 30 Benchmark rule
200 - 35 Effect of receiving a franked distribution
200 - 40 An Australian corporate tax entity can pass the benefit of having received a franked distribution on to its members
200 - 45 Special rules for franking by some entities
Division 201--Objects and application of Part 3 - 6
201 - 1 Objects
201 - 5 Application of this Part
Division 202--Franking a distribution
Subdivision 202 - A--Franking a distribution
Guide to Subdivision 202 - A
202 - 1 What this Subdivision is about
Operative provisions
202 - 5 Franking a distribution
Subdivision 202 - B--Who can frank a distribution?
Guide to Subdivision 202 - B
202 - 10 What this Subdivision is about
Operative provisions
202 - 15 Franking entities
202 - 20 Residency requirement when making a distribution
Subdivision 202 - C--Which distributions can be franked?
Guide to Subdivision 202 - C
202 - 25 What this Subdivision is about
202 - 30 Frankable distributions
Operative provisions
202 - 35 Object
202 - 40 Frankable distributions
202 - 45 Unfrankable distributions
202 - 47 Distributions of certain ADI profits following restructure
Subdivision 202 - D--Amount of the franking credit on a distribution
Guide to Subdivision 202 - D
202 - 50 What this Subdivision is about
202 - 55 What is the maximum franking credit for a frankable distribution?
Operative provisions
202 - 60 Amount of the franking credit on a distribution
202 - 65 Where the franking credit stated in the distribution statement exceeds the maximum franking credit for the distribution
Subdivision 202 - E--Distribution statements
Guide to Subdivision 202 - E
202 - 70 What this Subdivision is about
Operative provisions
202 - 75 Obligation to give a distribution statement
202 - 80 Distribution statement
202 - 85 Changing the franking credit on a distribution by amending the distribution statement
Division 203--Benchmark rule
Guide to Division 203
203 - 1 What this Division is about
203 - 5 Benchmark rule
203 - 10 Benchmark franking percentage
Operative provisions
203 - 15 Object
203 - 20 Application of the benchmark rule
203 - 25 Benchmark rule
203 - 30 Setting a benchmark franking percentage
203 - 35 Franking percentage
203 - 40 Franking periods--where the entity is not a private company
203 - 45 Franking period--private companies
203 - 50 Consequences of breaching the benchmark rule
203 - 55 Commissioner's powers to permit a departure from the benchmark rule
Division 204--Anti - streaming rules
Subdivision 204 - A--Objects and application
204 - 1 Objects
204 - 5 Application
Subdivision 204 - B--Linked distributions
Guide to Subdivision 204 - B
204 - 10 What this Subdivision is about
Operative provisions
204 - 15 Linked distributions
Subdivision 204 - C--Substituting tax - exempt bonus share for franked distributions
Guide to Subdivision 204 - C
204 - 20 What this Subdivision is about
Operative provisions
204 - 25 Substituting tax - exempt bonus shares for franked distributions
Subdivision 204 - D--Streaming distributions
Guide to Subdivision 204 - D
204 - 26 What this Subdivision is about
Operative provisions
204 - 30 Streaming distributions
204 - 35 When does a franking debit arise if the Commissioner makes a determination under paragraph 204 - 30(3)(a)
204 - 40 Amount of the franking debit
204 - 41 Amount of the exempting debit
204 - 45 Effect of a determination about distributions to favoured members
204 - 50 Assessment and notice of determination
204 - 55 Right to review where a determination made
Subdivision 204 - E--Disclosure requirements
Guide to Subdivision 204 - E
204 - 65 What this Subdivision is about
Operative provisions
204 - 70 Application of this Subdivision
204 - 75 Notice to the Commissioner
204 - 80 Commissioner may require information where the Commissioner suspects streaming
Division 205--Franking accounts, franking deficit tax liabilities and the related tax offset
Guide to Division 205
205 - 1 What this Division is about
205 - 5 Franking accounts, franking deficit tax liabilities and the related tax offset
Operative provisions
205 - 10 Each entity that is or has been a corporate tax entity has a franking account
205 - 15 Franking credits
205 - 20 Paying a PAYG instalment, income tax or diverted profits tax
205 - 25 Residency requirement for an event giving rise to a franking credit or franking debit
205 - 30 Franking debits
205 - 35 Refund of income tax or diverted profits tax
205 - 40 Franking surplus and deficit
205 - 45 Franking deficit tax
205 - 50 Deferring franking deficit
205 - 70 Tax offset arising from franking deficit tax liabilities
Division 207--Effect of receiving a franked distribution
Guide to Division 207
207 - 5 Overview
Subdivision 207 - A--Effect of receiving a franked distribution generally
Guide to Subdivision 207 - A
207 - 10 What this Subdivision is about
Operative provisions
207 - 15 Applying the general rule
207 - 20 General rule--gross - up and tax offset
Subdivision 207 - B--Franked distribution received through certain partnerships and trustees
Guide to Subdivision 207 - B
207 - 25 What this Subdivision is about
Gross - up and tax offset
207 - 30 Applying this Subdivision
207 - 35 Gross - up--distribution made to, or flows indirectly through, a partnership or trustee
207 - 37 Attributable franked distribution--trusts
207 - 45 Tax offset--distribution flows indirectly to an entity
Key concepts
207 - 50 When a franked distribution flows indirectly to or through an entity
207 - 55 Share of a franked distribution
207 - 57 Share of the franking credit on a franked distribution
207 - 58 Specifically entitled to an amount of a franked distribution
207 - 59 Franked distributions within class treated as single franked distribution
Subdivision 207 - C--Residency requirements for the general rule
Guide to Subdivision 207 - C
207 - 60 What this Subdivision is about
207 - 65 Satisfying the residency requirement
Operative provisions
207 - 70 Gross - up and tax offset under section 207 - 20
207 - 75 Residency requirement
Subdivision 207 - D--No gross - up or tax offset where distribution would not be taxed
Guide to Subdivision 207 - D
207 - 80 What this Subdivision is about
Operative provisions
207 - 85 Applying this Subdivision
207 - 90 Distribution that is made to an entity
207 - 95 Distribution that flows indirectly to an entity
Subdivision 207 - E--Exceptions to the rules in Subdivision 207 - D
Guide to Subdivision 207 - E
207 - 105 What this Subdivision is about
Operative provisions
207 - 110 Effect of non - assessable income on gross up and tax offset
Exempt institutions
207 - 115 Which exempt institutions are eligible for a refund?
207 - 117 Residency requirement
207 - 119 Entity not treated as exempt institution eligible for refund in certain circumstances
207 - 120 Entity may be ineligible because of a distribution event
207 - 122 Entity may be ineligible if distribution is in the form of property other than money
207 - 124 Entity may be ineligible if other money or property also acquired
207 - 126 Entity may be ineligible if distributions do not match trust share amounts
207 - 128 Reinvestment choice
207 - 130 Controller's liability
207 - 132 Treatment of benefits provided by an entity to a controller
207 - 134 Entity's present entitlement disregarded in certain circumstances
207 - 136 Review of certain decisions
Subdivision 207 - F--No gross - up or tax offset where the imputation system has been manipulated
Guide to Subdivision 207 - F
207 - 140 What this Subdivision is about
Operative provisions
207 - 145 Distribution that is made to an entity
207 - 150 Distribution that flows indirectly to an entity
207 - 155 When is a distribution made as part of a dividend stripping operation?
207 - 157 Distribution washing
207 - 158 Distributions entitled to a foreign income tax deduction
207 - 159 Distributions funded by capital raising
207 - 160 Distribution that is treated as an interest payment
Division 208--Exempting entities and former exempting entities
Guide to Division 208
208 - 5 What is an exempting entity?
208 - 10 Former exempting entities
208 - 15 Distributions by exempting entities and former exempting entities
Subdivision 208 - A--What are exempting entities and former exempting entities?
208 - 20 Exempting entities
208 - 25 Effective ownership of entity by prescribed persons
208 - 30 Accountable membership interests
208 - 35 Accountable partial interests
208 - 40 Prescribed persons
208 - 45 Persons who are taken to be prescribed persons
208 - 50 Former exempting companies
Subdivision 208 - B--Franking with an exempting credit
Guide to Subdivision 208 - B
208 - 55 What this Subdivision is about
Operative provisions
208 - 60 Franking with an exempting credit
Subdivision 208 - C--Amount of the exempting credit on a distribution
Guide to Subdivision 208 - C
208 - 65 What this Subdivision is about
Operative provisions
208 - 70 Amount of the exempting credit on a distribution
Subdivision 208 - D--Distribution statements
Guide to Subdivision 208 - D
208 - 75 Guide to Subdivision 208 - D
Operative provisions
208 - 80 Additional information to be included by a former exempting entity or exempting entity
Subdivision 208 - E--Distributions to be franked with exempting credits to the same extent
Guide to Subdivision 208 - E
208 - 85 What this Subdivision is about
Operative provisions
208 - 90 All frankable distributions made within a franking period must be franked to the same extent with an exempting credit
208 - 95 Exempting percentage
208 - 100 Consequences of breaching the rule in section 208 - 90
Subdivision 208 - F--Exempting accounts and franking accounts of exempting entities and former exempting entities
Guide to Subdivision 208 - F
208 - 105 What this Subdivision is about
Operative provisions
208 - 110 Exempting account
208 - 115 Exempting credits
208 - 120 Exempting debits
208 - 125 Exempting surplus and deficit
208 - 130 Franking credits arising because of status as exempting entity or former exempting entity
208 - 135 Relationships that will give rise to a franking credit under item 5 of the table in section 208 - 130
208 - 140 Membership of the same effectively wholly - owned group
208 - 145 Franking debits arising because of status as exempting entity or former exempting entity
208 - 150 Residency requirement
208 - 155 Eligible continuing substantial member
208 - 160 Distributions that are affected by a manipulation of the imputation system
208 - 165 Amount of the exempting credit or franking credit arising because of a distribution franked with an exempting credit
208 - 170 Where a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 affects part of the distribution
208 - 175 When does a distribution franked with an exempting credit flow indirectly to an entity?
208 - 180 What is an entity's share of the exempting credit on a distribution?
208 - 185 Minister may convert exempting surplus to franking credit of former exempting entity previously owned by the Commonwealth
Subdivision 208 - G--Tax effects of distributions by exempting entities
Guide to Subdivision 208 - G
208 - 190 What this Subdivision is about
Operative provisions
208 - 195 Division 207 does not generally apply
208 - 200 Distributions to exempting entities
208 - 205 Distributions to employees acquiring shares under eligible employee share schemes
208 - 215 Eligible employee share schemes
Subdivision 208 - H--Tax effect of a distribution franked with an exempting credit
Guide to Subdivision 208 - H
208 - 220 What this Subdivision is about
Operative provisions
208 - 225 Division 207 does not generally apply
208 - 230 Distributions to exempting entities and former exempting entities
208 - 235 Distributions to employees acquiring shares under eligible employee share schemes
208 - 240 Distributions to certain individuals
Division 210--Venture capital franking
Guide to Division 210
210 - 1 Purpose of venture capital franking
210 - 5 How is this achieved?
210 - 10 What is a venture capital credit?
210 - 15 What does the PDF have to do to distribute the credits?
210 - 20 Limits on venture capital franking
Subdivision 210 - A--Franking a distribution with a venture capital credit
Guide to Subdivision 210 - A
210 - 25 What this Subdivision is about
Operative provisions
210 - 30 Franking a distribution with a venture capital credit
Subdivision 210 - B--Participating PDFs
Guide to Subdivision 210 - B
210 - 35 What this Subdivision is about
Operative provisions
210 - 40 What is a participating PDF
Subdivision 210 - C--Distributions that are frankable with a venture capital credit
Guide to Subdivision 210 - C
210 - 45 What this Subdivision is about
Operative provisions
210 - 50 Which distributions can be franked with a venture capital credit?
Subdivision 210 - D--Amount of the venture capital credit on a distribution
Guide to Subdivision 210 - D
210 - 55 What this Subdivision is about
Operative provisions
210 - 60 Amount of the venture capital credit on a distribution
Subdivision 210 - E--Distribution statements
Guide to Subdivision 210 - E
210 - 65 What this Subdivision is about
Operative provisions
210 - 70 Additional information to be included when a distribution is franked with a venture capital credit
Subdivision 210 - F--Rules affecting the allocation of venture capital credits
Guide to Subdivision 210 - F
210 - 75 What this Subdivision is about
Operative provisions
210 - 80 Draining the venture capital surplus when a distribution frankable with venture capital credits is made
210 - 81 Distributions to be franked with venture capital credits to the same extent
210 - 82 Consequences of breaching the rule in section 210 - 81
Subdivision 210 - G--Venture capital sub - account
Guide to Subdivision 210 - G
210 - 85 What this Subdivision is about
210 - 90 The venture capital sub - account
210 - 95 Venture capital deficit tax
Operative provisions
210 - 100 Venture capital sub - account
210 - 105 Venture capital credits
210 - 110 Determining the extent to which a franking credit is reasonably attributable to a particular payment of tax
210 - 115 Participating PDF may elect to have venture capital credits arise on its assessment day
210 - 120 Venture capital debits
210 - 125 Venture capital debit where CGT limit is exceeded
210 - 130 Venture capital surplus and deficit
210 - 135 Venture capital deficit tax
210 - 140 Effect of a liability to pay venture capital deficit tax on franking deficit tax
210 - 145 Effect of a liability to pay venture capital deficit tax on the franking account
210 - 150 Deferring venture capital deficit
Subdivision 210 - H--Effect of receiving a distribution franked with a venture capital credit
Guide to Subdivision 210 - H
210 - 155 What this Subdivision is about
210 - 160 The significance of a venture capital credit
210 - 165 Recipients for whom the venture capital credit is not significant
Operative provisions
210 - 170 Tax offset for certain recipients of distributions franked with venture capital credits
210 - 175 Amount of the tax offset
210 - 180 Application of Division 207 where the recipient is entitled to a tax offset under section 210 - 170
Division 214--Administering the imputation system
Guide to Division 214
214 - 1 Purpose of the system
214 - 5 Key features
Subdivision 214 - A--Franking returns
Guide to Subdivision 214 - A
214 - 10 What this Subdivision is about
Operative provisions
214 - 15 Requirement to give franking return--general
214 - 20 Notice to a specific corporate tax entity
214 - 25 Content and form of a franking return
214 - 30 Franking account balance
214 - 35 Venture capital sub - account balance
214 - 40 Meaning of franking tax
214 - 45 Effect of a refund on franking returns
Subdivision 214 - B--Franking assessments
Guide to Subdivision 214 - B
214 - 55 What this Subdivision is about
Operative provisions
214 - 60 Commissioner may make a franking assessment
214 - 65 Commissioner taken to have made a franking assessment on first return
214 - 70 Part - year assessment
214 - 75 Validity of assessment
214 - 80 Objections
Subdivision 214 - C--Amending franking assessments
Guide to Subdivision 214 - C
214 - 90 What this Subdivision is about
Operative provisions
214 - 95 Amendments within 3 years of the original assessment
214 - 100 Amended assessments are treated as franking assessments
214 - 105 Further return as a result of a refund affecting a franking deficit tax liability
214 - 110 Later amendments--on request
214 - 115 Later amendments--failure to make proper disclosure
214 - 120 Later amendments--fraud or evasion
214 - 125 Further amendment of an amended particular
214 - 135 Amendment on review etc.
214 - 140 Notice of amendments
Subdivision 214 - D--Collection and recovery
Guide to Subdivision 214 - D
214 - 145 What this Subdivision is about
Operative provisions
214 - 150 Due date for payment of franking tax
214 - 155 General interest charge
214 - 160 Refunds of amounts overpaid
Subdivision 214 - E--Records
Guide to Subdivision 214 - E
214 - 170 What this Subdivision is about
Operative provisions
214 - 175 Record keeping
Division 215--Consequences of the debt/equity rules
Subdivision 215 - A--Application of the imputation system to non - share equity interests
215 - 1 Application of the imputation system to non - share equity interests
Subdivision 215 - B--Non - share dividends that are unfrankable to some extent
Guide to Subdivision 215 - B
215 - 5 What this Subdivision is about
215 - 10 Certain non - share dividends by ADIs unfrankable
215 - 15 Non - share dividends are unfrankable if profits are unavailable
215 - 20 Working out the available frankable profits
215 - 25 Anticipating available frankable profits
Division 216--Cum dividend sales and securities lending arrangements
Subdivision 216 - A--Circumstances where a distribution to a member of a corporate tax entity is treated as having been made to someone else
216 - 1 When a distribution made to a member of a corporate tax entity is treated as having been made to someone else
216 - 5 First situation (cum dividend sales)
216 - 10 Second situation (securities lending arrangements)
216 - 15 Distribution closing time
Subdivision 216 - B--Statements to be made where there is a cum dividend sale or securities lending arrangement
216 - 20 Cum dividend sale--statement by securities dealer
216 - 25 Cum dividend sale--statement by party
216 - 30 Securities lending arrangements--statement by borrower
Division 218--Application of imputation rules to co - operative companies
218 - 5 Application of imputation rules to co - operative companies
Division 219--Imputation for life insurance companies
Guide to Division 219
219 - 1 What this Division is about
Subdivision 219 - A--Application of imputation rules to life insurance companies
219 - 10 Application of imputation rules to life insurance companies
Subdivision 219 - B--Franking accounts of life insurance companies
219 - 15 Franking credits
219 - 30 Franking debits
219 - 40 Residency requirement
219 - 45 Assessment day
219 - 50 Amount attributable to shareholders' share of income tax liability
219 - 55 Adjustment resulting from an amended assessment
219 - 70 Tax offset under section 205 - 70
219 - 75 Working out franking credits and franking debits where a tax offset under section 205 - 70 is applied
Division 220--Imputation for NZ resident companies and related companies
Guide to Division 220
220 - 1 What this Division is about
Subdivision 220 - A--Objects of this Division
220 - 15 Objects
220 - 20 What is an NZ resident ?
Subdivision 220 - B--NZ company treated as Australian resident for imputation system if company chooses
220 - 25 Application of provisions of Part 3 - 6 outside this Division
220 - 30 What is an NZ franking company ?
220 - 35 Making an NZ franking choice
220 - 40 When is an NZ franking choice in force?
220 - 45 Revoking an NZ franking choice
220 - 50 Cancelling an NZ franking choice
Subdivision 220 - C--Modifications of other Divisions of this Part
Franking NZ franking companies' distributions
220 - 100 Residency requirement for franking
220 - 105 Unfrankable distributions by NZ franking companies
220 - 110 Maximum franking credit under section 202 - 60
NZ franking companies' franking accounts etc.
220 - 205 Franking credit for payment of NZ franking company's withholding tax liability
220 - 210 Effect of franked distribution to NZ franking company or flowing indirectly to NZ franking company
220 - 215 Effect on franking account if NZ franking choice ceases to be in force
Franking accounts of NZ franking company and some of its 100% subsidiaries
220 - 300 NZ franking company's franking account affected by franking accounts of some of its 100% subsidiaries
Effect of NZ franking company making distribution that is non - assessable and non - exempt
220 - 350 Providing for a franking credit to arise
Effects of supplementary dividend from NZ franking company
220 - 400 Gross - up and tax offset for distribution from NZ franking company reduced by supplementary dividend
220 - 405 Franked distribution and supplementary dividend flowing indirectly
220 - 410 Franking credit reduced if tax offset reduced
Rules about exempting entities
220 - 500 Publicly listed post - choice NZ franking company and its 100% subsidiaries are not exempting entities
220 - 505 Post - choice NZ franking company is not automatically prescribed person
220 - 510 Parent company's status as prescribed person sets status of all other members of same wholly - owned group
NZ franking companies' exempting accounts
220 - 605 Effect on exempting account if NZ franking choice ceases to be in force
Tax effect of distribution franked by NZ franking company with an exempting credit
220 - 700 Tax effect of distribution franked by NZ franking company with an exempting credit
Joint and several liability for NZ resident company's unmet franking liabilities
220 - 800 Joint and several liability for NZ resident company's franking tax etc.
Part 3 - 10--Financial transactions
Division 230--Taxation of financial arrangements
Guide to Division 230
230 - 1 What this Division is about
230 - 5 Scope of this Division
Subdivision 230 - A--Core rules
Objects
230 - 10 Objects of this Division
Tax treatment of gains and losses from financial arrangements
230 - 15 Gains are assessable and losses deductible
230 - 20 Gain or loss to be taken into account only once under this Act
230 - 25 Associated financial benefits to be taken into account only once under this Act
230 - 30 Treatment of gains and losses related to exempt income and non - assessable non - exempt income
230 - 35 Treatment of gains and losses of private or domestic nature
Method to be applied to take account of gain or loss
230 - 40 Methods for taking gain or loss into account
Financial arrangement concept
230 - 45 Financial arrangement
230 - 50 Financial arrangement (equity interest or right or obligation in relation to equity interest)
230 - 55 Rights, obligations and arrangements (grouping and disaggregation rules)
General rules
230 - 60 When financial benefit provided or received under financial arrangement
230 - 65 Amount of financial benefit relating to more than one financial arrangement etc.
230 - 70 Apportionment when financial benefit received or right ceases
230 - 75 Apportionment when financial benefit provided or obligation ceases
230 - 80 Consistency in working out gains or losses (integrity measure)
230 - 85 Rights and obligations include contingent rights and obligations
Subdivision 230 - B--The accruals/realisation methods
Guide to Subdivision 230 - B
230 - 90 What this Subdivision is about
Objects of Subdivision
230 - 95 Objects of this Subdivision
When accruals method or realisation method applies
230 - 100 When accruals method or realisation method applies
230 - 105 Sufficiently certain overall gain or loss
230 - 110 Sufficiently certain gain or loss from particular event
230 - 115 Sufficiently certain financial benefits
230 - 120 Financial arrangements with notional principal
The accruals method
230 - 125 Overview of the accruals method
230 - 130 Applying accruals method to work out period over which gain or loss is to be spread
230 - 135 How gain or loss is spread
230 - 140 Method of spreading gain or loss--effective interest method
230 - 145 Application of effective interest method where differing income and accounting years
230 - 150 Election for portfolio treatment of fees
230 - 155 Election for portfolio treatment of fees where differing income and accounting years
230 - 160 Portfolio treatment of fees
230 - 165 Portfolio treatment of premiums and discounts for acquiring portfolio
230 - 170 Allocating gain or loss to income years
230 - 172 Applying accruals method to loss resulting from impairment
230 - 175 Running balancing adjustments
Realisation method
230 - 180 Realisation method
Reassessment and re - estimation
230 - 185 Reassessment
230 - 190 Re - estimation
230 - 192 Re - estimation--impairments and reversals
230 - 195 Balancing adjustment if rate of return maintained on re - estimation
230 - 200 Re - estimation if balancing adjustment on partial disposal
Subdivision 230 - C--Fair value method
230 - 205 Objects of this Subdivision
230 - 210 Fair value election
230 - 215 Fair value election where differing income and accounting years
230 - 220 Financial arrangements to which fair value election applies
230 - 225 Financial arrangements to which election does not apply
230 - 230 Applying fair value method to gains and losses
230 - 235 Splitting financial arrangements into 2 financial arrangements
230 - 240 When election ceases to apply
230 - 245 Balancing adjustment if election ceases to apply
Subdivision 230 - D--Foreign exchange retranslation method
230 - 250 Objects of this Subdivision
230 - 255 Foreign exchange retranslation election
230 - 260 Foreign exchange retranslation election where differing income and accounting years
230 - 265 Financial arrangements to which general election applies
230 - 270 Financial arrangements to which general election does not apply
230 - 275 Balancing adjustment for election in relation to qualifying forex accounts
230 - 280 Applying foreign exchange retranslation method to gains and losses
230 - 285 When election ceases to apply
230 - 290 Balancing adjustment if election ceases to apply
Subdivision 230 - E--Hedging financial arrangements method
230 - 295 Objects of this Subdivision
230 - 300 Applying hedging financial arrangement method to gains and losses
230 - 305 Table of events and allocation rules
230 - 310 Aligning tax classification of gain or loss from hedging financial arrangement with tax classification of hedged item
230 - 315 Hedging financial arrangement election
230 - 320 Hedging financial arrangement election where differing income and accounting years
230 - 325 Hedging financial arrangements to which election applies
230 - 330 Hedging financial arrangements to which election does not apply
230 - 335 Hedging financial arrangement and hedged item
230 - 340 Generally whole arrangement must be hedging financial arrangement
230 - 345 Requirements not satisfied because of honest mistake or inadvertence
230 - 350 Derivative financial arrangement and foreign currency hedge
230 - 355 Recording requirements
230 - 360 Determining basis for allocating gain or loss
230 - 365 Effectiveness of the hedge
230 - 370 When election ceases to apply
230 - 375 Balancing adjustment if election ceases to apply
230 - 380 Commissioner may determine that requirement met
230 - 385 Consequences of failure to meet requirements
Subdivision 230 - F--Reliance on financial reports
230 - 390 Objects of this Subdivision
230 - 395 Election to rely on financial reports
230 - 400 Financial reports election where differing income and accounting years
230 - 405 Commissioner discretion to waive requirements in paragraphs 230 - 395(2)(c) and (e)
230 - 410 Financial arrangements to which the election applies
230 - 415 Financial arrangements not covered by election
230 - 420 Effect of election to rely on financial reports
230 - 425 When election ceases to apply
230 - 430 Balancing adjustment if election ceases to apply
Subdivision 230 - G--Balancing adjustment on ceasing to have a financial arrangement
230 - 435 When balancing adjustment made
230 - 440 Exceptions
230 - 445 Balancing adjustment
Subdivision 230 - H--Exceptions
230 - 450 Short - term arrangements where non - money amount involved
230 - 455 Certain taxpayers where no significant deferral
230 - 460 Various rights and/or obligations
230 - 465 Ceasing to have a financial arrangement in certain circumstances
230 - 470 Forgiveness of commercial debts
230 - 475 Clarifying exceptions
230 - 480 Treatment of gains in form of franked distribution etc.
230 - 481 Registered emissions units
Subdivision 230 - I--Other provisions
230 - 485 Effect of change of residence--rules for particular methods
230 - 490 Effect of change of residence--disposal and reacquisition etc. after ceasing to be Australian resident where no further recognised gains or losses from arrangement
230 - 495 Effect of change of accounting principles or standards
230 - 500 Comparable foreign accounting and auditing standards
230 - 505 Financial arrangement as consideration for provision or acquisition of a thing
230 - 510 Non - arm's length dealings in relation to financial arrangement
230 - 515 Arm's length dealings in relation to financial arrangement--adjustment to gain or loss in certain situations
230 - 520 Disregard gains or losses covered by value shifting regime
230 - 522 Adjusting a gain or loss that gives rise to a hybrid mismatch
230 - 525 Consolidated financial reports
230 - 527 Elections--reporting documents of foreign ADIs
Subdivision 230 - J--Additional operation of Division
230 - 530 Additional operation of Division
Division 235--Particular financial transactions
Guide to Division 235
235 - 1 What this Division is about
Subdivision 235 - I--Instalment trusts
Guide to Subdivision 235 - I
235 - 805 What this Subdivision is about
Operative provisions
235 - 810 Object of this Subdivision
235 - 815 Application of Subdivision
235 - 820 Look - through treatment for instalment trusts
235 - 825 Meaning of instalment trust and instalment trust asset
235 - 830 What trusts are covered--instalment trust arrangements
235 - 835 Requirement for underlying investments to be listed or widely held
235 - 840 What trusts are covered--limited recourse borrowings by regulated superannuation funds
235 - 845 Interactions with other provisions
Division 240--Arrangements treated as a sale and loan
Guide to Division 240
240 - 1 What this Division is about
240 - 3 How the recharacterisation affects the notional seller
240 - 7 How the recharacterisation affects the notional buyer
Subdivision 240 - A--Application and scope of Division
Operative provisions
240 - 10 Application of this Division
240 - 15 Scope of Division
Subdivision 240 - B--The notional sale and notional loan
Operative provisions
240 - 17 Who is the notional seller and the notional buyer?
240 - 20 Notional sale of property by notional seller and notional acquisition of property by notional buyer
240 - 25 Notional loan by notional seller to notional buyer
Subdivision 240 - C--Amounts to be included in notional seller's assessable income
Guide to Subdivision 240 - C
240 - 30 What this Subdivision is about
Operative provisions
240 - 35 Amounts to be included in notional seller's assessable income
240 - 40 Arrangement payments not to be included in notional seller's assessable income
Subdivision 240 - D--Deductions allowable to notional buyer
Guide to Subdivision 240 - D
240 - 45 What this Subdivision is about
Operative provisions
240 - 50 Extent to which deductions are allowable to notional buyer
240 - 55 Arrangement payments not to be deductions
Subdivision 240 - E--Notional interest and arrangement payments
Operative provisions
240 - 60 Notional interest
240 - 65 Arrangement payments
240 - 70 Arrangement payment periods
Subdivision 240 - F--The end of the arrangement
Operative provisions
240 - 75 When is the end of the arrangement?
240 - 80 What happens if the arrangement is extended or renewed
240 - 85 What happens if an amount is paid by or on behalf of the notional buyer to acquire the property
240 - 90 What happens if the notional buyer ceases to have the right to use the property
Subdivision 240 - G--Adjustments if total amount assessed to notional seller differs from amount of interest
Guide to Subdivision 240 - G
240 - 100 What this Subdivision is about
Operative provisions
240 - 105 Adjustments for notional seller
240 - 110 Adjustments for notional buyer
Subdivision 240 - H--Application of Division 16E to certain arrangements
240 - 112 Division 16E applies to certain arrangements
Subdivision 240 - I--Provisions applying to hire purchase agreements
Operative provisions
240 - 115 Another person, or no person taken to own property in certain cases
Division 242--Leases of luxury cars
Guide to Division 242
242 - 1 What this Division is about
Subdivision 242 - A--Notional sale and loan
Guide to Subdivision 242 - A
242 - 5 What this Subdivision is about
Operative provisions
242 - 10 Application
242 - 15 Notional sale and acquisition
242 - 20 Consideration for notional sale, and cost, of car
242 - 25 Notional loan by lessor to lessee
Subdivision 242 - B--Amount to be included in lessor's assessable income
Guide to Subdivision 242 - B
242 - 30 What this Subdivision is about
Operative provisions
242 - 35 Amount to be included in lessor's assessable income
242 - 40 Treatment of lease payments
Subdivision 242 - C--Deductions allowable to lessee
Guide to Subdivision 242 - C
242 - 45 What this Subdivision is about
Operative provisions
242 - 50 Extent to which deductions are allowable to lessee
242 - 55 Lease payments not deductible
Subdivision 242 - D--Adjustments if total amount assessed to lessor differs from amount of interest
Guide to Subdivision 242 - D
242 - 60 What this Subdivision is about
Operative provisions
242 - 65 Adjustments for lessor
242 - 70 Adjustments for lessee
Subdivision 242 - E--Extension, renewal and final ending of the lease
Guide to Subdivision 242 - E
242 - 75 What this Subdivision is about
Operative provisions
242 - 80 What happens if the term of the lease is extended or the lease is renewed
242 - 85 What happens if an amount is paid by the lessee to acquire the car
242 - 90 What happens if the lessee stops having the right to use the car
Division 243--Limited recourse debt
Guide to Division 243
243 - 10 What this Division is about
Subdivision 243 - A--Circumstances in which Division operates
Operative provisions
243 - 15 When does this Division apply?
243 - 20 What is limited recourse debt?
243 - 25 When is a debt arrangement terminated?
243 - 30 What is the financed property and the debt property?
Subdivision 243 - B--Working out the excessive deductions
Operative provisions
243 - 35 Working out the excessive deductions
Subdivision 243 - C--Amounts included in assessable income and deductions
Operative provisions
243 - 40 Amount included in debtor's assessable income
243 - 45 Deduction for later payments in respect of debt
243 - 50 Deduction for payments for replacement debt
243 - 55 Effect of Division on later capital allowance deductions
243 - 57 Effect of Division on later capital allowance balancing adjustments
243 - 58 Adjustment where debt only partially used for expenditure
Subdivision 243 - D--Special provisions
Operative provisions
243 - 60 Application of Division to partnerships
243 - 65 Application where partner reduces liability
243 - 70 Application of Division to companies ceasing to be 100% subsidiary
243 - 75 Application of Division where debt forgiveness rules also apply
Division 245--Forgiveness of commercial debts
Guide to Division 245
245 - 1 What this Division is about
245 - 2 Simplified outline of this Division
Subdivision 245 - A--Debts to which operative rules apply
Guide to Subdivision 245 - A
245 - 5 What this Subdivision is about
Application of Division
245 - 10 Commercial debts
245 - 15 Non - equity shares
245 - 20 Parts of debts
Subdivision 245 - B--What constitutes forgiveness of a debt
Guide to Subdivision 245 - B
245 - 30 What this Subdivision is about
Operative provisions
245 - 35 What constitutes forgiveness of a debt
245 - 36 What constitutes forgiveness of a debt if the debt is assigned
245 - 37 What constitutes forgiveness of a debt if a subscription for shares enables payment of the debt
245 - 40 Forgivenesses to which operative rules do not apply
245 - 45 Application of operative rules if forgiveness involves an arrangement
Subdivision 245 - C--Calculation of gross forgiven amount of a debt
Guide to Subdivision 245 - C
245 - 48 What this Subdivision is about
Working out the value of a debt
245 - 50 Extent of forgiveness if consideration is given
245 - 55 General rule for working out the value of a debt
245 - 60 Special rule for working out the value of a non - recourse debt
245 - 61 Special rule for working out the value of a previously assigned debt
Working out if an amount is offset against the value of the debt
245 - 65 Amount offset against amount of debt
Working out the gross forgiven amount
245 - 75 Gross forgiven amount of a debt
245 - 77 Gross forgiven amount shared between debtors
Subdivision 245 - D--Calculation of net forgiven amount of a debt
Guide to Subdivision 245 - D
245 - 80 What this Subdivision is about
Operative provisions
245 - 85 Reduction of gross forgiven amount
245 - 90 Agreement between companies under common ownership for creditor to forgo capital loss or deduction
Subdivision 245 - E--Application of net forgiven amounts
Guide to Subdivision 245 - E
245 - 95 What this Subdivision is about
General operative provisions
245 - 100 Subdivision not to apply to calculation of attributable income
245 - 105 How total net forgiven amount is applied
Reduction of tax losses
245 - 115 Total net forgiven amount is applied in reduction of tax losses
245 - 120 Allocation of total net forgiven amount in respect of tax losses
Reduction of net capital losses
245 - 130 Remaining total net forgiven amount is applied in reduction of net capital losses
245 - 135 Allocation of remaining total net forgiven amount in respect of net capital losses
Reduction of expenditure
245 - 145 Remaining total net forgiven amount is applied in reduction of expenditure
245 - 150 Allocation of remaining total net forgiven amount in respect of expenditures
245 - 155 How expenditure is reduced--straight line deductions
245 - 157 How expenditure is reduced--diminishing balance deductions
245 - 160 Amount applied in reduction of expenditure included in assessable income in certain circumstances
Reduction of cost bases of assets
245 - 175 Remaining total net forgiven amount is applied in reduction of cost bases of CGT assets
245 - 180 Allocation of remaining total net forgiven amount among relevant cost bases of CGT assets
245 - 185 Relevant cost bases of investments in associated entities are reduced last
245 - 190 Reduction of the relevant cost bases of a CGT asset
Unapplied total net forgiven amount
245 - 195 No further consequences if there is any remaining unapplied total net forgiven amount
Subdivision 245 - F--Special rules relating to partnerships
Guide to Subdivision 245 - F
245 - 200 What this Subdivision is about
Operative provisions
245 - 215 Unapplied total net forgiven amount of a partnership is transferred to partners
Subdivision 245 - G--Record keeping
245 - 265 Keeping and retaining records
Division 247--Capital protected borrowings
Guide to Division 247
247 - 1 What this Division is about
Operative provisions
247 - 5 Object of Division
247 - 10 What capital protected borrowing and capital protection are
247 - 15 Application of this Division
247 - 20 Treating capital protection as a put option
247 - 25 Number of put options
247 - 30 Exercise or expiry of option
Division 250--Assets put to tax preferred use
Guide to Division 250
250 - 1 What this Division is about
Subdivision 250 - A--Objects
250 - 5 Main objects
Subdivision 250 - B--When this Division applies to you and an asset
Overall test
250 - 10 When this Division applies to you and an asset
250 - 15 General test
250 - 20 First exclusion--small business entities
250 - 25 Second exclusion--financial benefits under minimum value limit
250 - 30 Third exclusion--certain short term or low value arrangements
250 - 35 Exceptions to section 250 - 30
250 - 40 Fourth exclusion--sum of present values of financial benefits less than amount otherwise assessable
250 - 45 Fifth exclusion--Commissioner determination
Tax preferred use of asset
250 - 50 End user of an asset
250 - 55 Tax preferred end user
250 - 60 Tax preferred use of an asset
250 - 65 Arrangement period for tax preferred use
250 - 70 New tax preferred use at end of arrangement period if tax preferred use continues
250 - 75 What constitutes a separate asset for the purposes of this Division
250 - 80 Treatment of particular arrangements in the same way as leases
Financial benefits in relation to tax preferred use
250 - 85 Financial benefits in relation to tax preferred use of an asset
250 - 90 Financial benefit provided directly or indirectly
250 - 95 Expected financial benefits in relation to an asset put to tax preferred use
250 - 100 Present value of financial benefit that has already been provided
Discount rate to be used in working out present values
250 - 105 Discount rate to be used in working out present values
250 - 110 Predominant economic interest
250 - 115 Limited recourse debt test
250 - 120 Right to acquire asset test
250 - 125 Effectively non - cancellable, long term arrangement test
250 - 130 Meaning of effectively non - cancellable arrangement
250 - 135 Level of expected financial benefits test
250 - 140 When to retest predominant economic interest under section 250 - 135
Subdivision 250 - C--Denial of, or reduction in, capital allowance deductions
250 - 145 Denial of capital allowance deductions
250 - 150 Apportionment rule
Subdivision 250 - D--Deemed loan treatment of financial benefits provided for tax preferred use
250 - 155 Arrangement treated as loan
250 - 160 Financial benefits that are subject to deemed loan treatment
250 - 180 End value of asset
250 - 185 Financial benefits subject to deemed loan treatment not assessed
Subdivision 250 - E--Taxation of deemed loan
Guide to Subdivision 250 - E
250 - 190 What this Subdivision is about
Application and objects of Subdivision
250 - 195 Application of Subdivision
250 - 200 Objects of this Subdivision
Tax treatment of gains and losses from financial arrangements
250 - 205 Gains are assessable and losses deductible
250 - 210 Gain or loss to be taken into account only once under this Act
Method to be applied to take account of gain or loss
250 - 215 Methods for taking gain or loss into account
General rules
250 - 220 Consistency in working out gains or losses (integrity measure)
250 - 225 Rights and obligations include contingent rights and obligations
The accruals method
250 - 230 Application of accruals method
250 - 235 Overview of the accruals method
250 - 240 Applying accruals method to work out period over which gain or loss is to be spread
250 - 245 How gain or loss is spread
250 - 250 Allocating gain or loss to income years
250 - 255 When to re - estimate
250 - 260 Re - estimation if balancing adjustment on partial disposal
Balancing adjustment
250 - 265 When balancing adjustment made
250 - 270 Exception for subsidiary member leaving consolidated group
250 - 275 Balancing adjustment
Other provisions
250 - 280 Financial arrangement received or provided as consideration
Subdivision 250 - F--Treatment of asset when Division ceases to apply to the asset
250 - 285 Treatment of asset after Division ceases to apply to the asset
250 - 290 Balancing adjustment under Subdivision 40 - D in some circumstances
Subdivision 250 - G--Objections against determinations and decisions by the Commissioner
250 - 295 Objections against determinations and decisions by the Commissioner
Division 253--Financial claims scheme for account - holders with insolvent ADIs
Subdivision 253 - A--Tax treatment of entitlements under financial claims scheme
Guide to Subdivision 253 - A
253 - 1 What this Subdivision is about
Operative provisions
253 - 5 Payment of entitlement under financial claims scheme treated as payment from ADI
253 - 10 Disposal of rights against ADI to APRA and meeting of financial claims scheme entitlement have no CGT effects
253 - 15 Cost base of financial claims scheme entitlement and any remaining part of account that gave rise to entitlement