Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 820.415

Amount of debt deduction disallowed

                   The amount of * debt deduction disallowed under subsection 820-395(1) is worked out using the following formula:

where:

"average debt" means the average value, for the income year, of all the * debt capital of the entity that gives rise to * debt deductions of the entity (other than * allowable OB deductions) for that or any other income year.

"capital shortfall" means the amount by which the entity's * average equity capital for that year (see subsection 820-395(3)) is less than the entity's * minimum capital amount for that year.

"debt deduction" means each * debt deduction of the entity (other than * allowable OB deduction) for the income year.

Note:          The disallowed amount also does not form part of the cost base of a CGT asset. See section 110-54.



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