(1) The Commissioner may disallow some or all of the deduction if:
(a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and
(b) the scheme would not have been entered into or carried out if the debt had not been incurred and the debt (or the relevant part of the debt) had not been written off (or able to be written off) as bad.
(2) However, the Commissioner cannot disallow any of the deduction if:
(a) the person had a * shareholding interest in the company at some time during the income year; and
(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note: Section 175-100 allows the Commissioner to disallow some or all of a deduction of an insolvent company.
(3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .
Table of sections
175-95 When a person has a shareholding interest in the company
175-100 Commissioner may disallow excluded losses etc. of insolvent companies