Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 243.25

When is a debt arrangement terminated?

             (1)  A debt arrangement is taken to have terminated if:

                     (a)  it is actually terminated; or

                     (b)  the debtor's obligation to repay the debt is waived, novated or otherwise varied so as to reduce, transfer or extinguish the debt; or

                     (c)  an agreement is entered into to waive, novate or otherwise vary the debtor's obligation to repay the debt so as to reduce, transfer or extinguish the debt; or

                     (d)  the creditor ceases to have an entitlement to recover the debt from the debtor (other than as a result of an * arm's length assignment of some or all of the creditor's rights under the debt arrangement); or

                     (e)  the debtor ceases to be the owner or the * quasi-owner of some or all of the * debt property because that property is surrendered to the creditor because of the debtor's failure to pay the whole or a part of the debt; or

                      (f)  the debtor ceases to be the owner of a beneficial interest in some or all of the debt property because the interest is surrendered to the creditor because of the debtor's failure to pay the whole or a part of the debt; or

                     (g)  the debt becomes a bad debt.

             (2)  However, a debt arrangement that is a notional loan arising because of Division 240 (about arrangements treated as a sale and loan) is not taken to have terminated merely because it has been renewed or extended.

Note:          Under Division 240, notional loans are taken to have ended if the relevant arrangement is renewed or extended.

             (3)  Where a debt is terminated under paragraph (1)(b) or (c) as a result of the debt being reduced, the remaining debt is taken to be a new debt to which section 243-15 applies.



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