(1) You will not be allowed a deduction under this Division for an income year if the Commissioner is satisfied that:
(a) you entered into an * arrangement with:
(i) an entity to which section 50 - 5, 50 - 10, 50 - 15, 50 - 25, 50 - 30, 50 - 40 or 50 - 45 (dealing with * exempt income) applies; or
(ii) an STB (within the meaning of Division 1AB of Part III of the Income Tax Assessment Act 1936 ) whose * ordinary income and * statutory income is exempt from income tax;
under which you were to pay an amount, or transfer property, directly or indirectly, to the entity; and
(b) the amount of the payment or the value of the property is calculated by reference to the amount of a deduction allowable to you under this Division; and
(c) a purpose of the arrangement that is not a merely incidental purpose is to ensure that the benefit of the deduction would pass wholly or substantially to the entity, whether directly or indirectly.
(2) Subsection (1) applies to * arrangements entered into with an entity referred to in subparagraph (1)(a)(i) after 1 May 1980 that relate to deductions for * hotel buildings or * apartment buildings begun before 1 July 1997.
(3) Subsection (1) also applies to * arrangements entered
into with an entity referred to in subparagraph (1)(a)(ii) after 30
June 1994 that relate to deductions for * hotel buildings or *
apartment buildings begun before 1 July 1997.