Income Tax Assessment Act 1936 Act No. 27 of 1936 as amended This compilation was prepared on 27 October 2008 taking into account amendments up to Act No. 105 of 2008 Volume 2 includes: Table of Contents Sections 79A - 121L The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section Part III-Liability to taxation Division 3-Deductions Contents Part III-Liability to taxation i Division 3-Deductions i 79A Rebates for residents of isolated areas 1 79B Rebates for members of Defence Force serving overseas 6 82 Double deductions 10 82A Deductions for expenses of self-education 10 Subdivision CB-Regional Headquarters (RHQs) 12 82C Object 12 82CA Deduction for setup costs of RHQ companies 12 82CB Interpretation 12 82CC Associated companies 14 82CD Application to become an RHQ company 14 82CE Determination of RHQ companies 14 Subdivision D-Losses and outgoings incurred under certain tax avoidance schemes 15 82KH Interpretation 15 82KJ Deduction not allowable in respect of certain pre-paid outgoings 39 82KK Schemes designed to postpone tax liability 39 82KL Tax benefit not allowable in respect of certain recouped expenditure 42 Subdivision H-Period of deductibility of certain advance expenditure 44 82KZL Interpretation 44 82KZLA Subdivision does not apply to financial arrangements to which Subdivision 250-E applies 46 82KZM Expenditure by small business entities and individuals incurring non-business expenditure 47 82KZMAApplication of section 82KZMD 48 82KZMDBusiness expenditure and non-business expenditure by non-individual 49 82KZMEExpenditure under some agreements 49 82KZMFProportional deduction 52 82KZMGDeductions for certain forestry expenditure 52 82KZMGADeductions for certain forestry expenditure 54 82KZMGBCGT event in relation to interest in 82KZMG agreement 54 82KZN Transfer etc. of rights under agreement 55 82KZO Partnership changes where entire interest in agreement rights is not transferred 56 Division 3A-Convertible notes 58 82LA Application of Division 58 82L Interpretation 58 82M New loans and replacement loans 62 82N Prescribed stock exchanges 63 82P Bonus share allotments 63 82Q Classes of shares 65 82R Interest on certain convertible notes not to be an allowable deduction 65 82SA Interest on certain convertible notes to be an allowable deduction-where loan made on or after 1 January 1976 66 82T Value of shares 70 Division 5-Partnerships 72 90 Interpretation 72 91 Liability of partnerships 72 92 Income and deductions of partner 72 92A Deductions in respect of outstanding subsection 92(2AA) amounts 74 94 Partner not having control and disposal of share in partnership income 76 Division 5A-Income of certain limited partnerships 86 Subdivision A-Preliminary 86 94A Object 86 94B Interpretation 86 94C Continuity of limited partnership not affected by changes in composition 86 Subdivision B-Corporate limited partnerships 87 94D Corporate limited partnerships 87 94E Continuity of business test 88 94F Change in composition of limited partnership-election that partnership not be treated as an eligible limited partnership 89 94G Continuity of ownership test 89 Subdivision C-Corporate tax modifications applicable to corporate limited partnerships 90 94H Corporate tax modifications applicable to corporate limited partnerships 90 94J Company includes corporate limited partnership 90 94K Partnership does not include corporate limited partnership 90 94L Dividend includes distribution of corporate limited partnership 90 94M Drawings etc. deemed to be dividends paid out of profits 91 94N Private company does not include corporate limited partnership 91 94P Share includes interest in corporate limited partnership 91 94Q Shareholder includes partner in corporate limited partnership 91 94R Liquidator may include partner in corporate limited partnership 91 94S Continuity of corporate limited partnership not affected by changes in composition 92 94T Residence of corporate limited partnership 92 94U Incorporation 92 94V Obligations and offences 92 94X Modification of loss provisions 93 Division 6-Trust income 94 95 Interpretation 94 95AA Division does not apply in relation to FHSA trust 95 95A Special provisions relating to present entitlement 95 95B Certain beneficiaries deemed not to be under legal disability 95 96 Trustees 95 96A Application of Division in respect of interests in non- resident trust estates to which Part XI applies 95 96B Beneficiary of non-resident trust estate 98 96C Calculation of beneficiary's share of net income of non- resident trust estate 99 97 Beneficiary not under any legal disability 102 97A Beneficiaries who are owners of farm management deposits 104 98 Liability of trustee 105 98A Non-resident beneficiaries assessable in respect of certain income 107 98B Deduction from beneficiary's tax 109 99 Certain trust income to be taxed as income of an individual 110 99A Certain trust income to be taxed at special rate 111 99B Receipt of trust income not previously subject to tax 114 99C Determining whether property is applied for benefit of beneficiary 116 99D Refund of tax to non-resident beneficiary 117 99E Later trust not taxed on income already taxed under subsection 98(4) 118 99G Amounts covered by withholding requirement 118 99H Late payments 118 100 Beneficiary assessable in respect of certain trust income 119 100A Present entitlement arising from reimbursement agreement 121 101 Discretionary trusts 127 101A Income of deceased received after death 127 102 Revocable trusts 128 Division 6AAA-Special provisions relating to non-resident trust estates etc. 130 Subdivision A-Preliminary 130 102AAA Object of Division 130 102AAB Interpretation 130 102AAC Each listed country and unlisted country to be treated as a separate foreign country 136 102AAD Subject to tax-application of subsection 324(2) 136 102AAE Listed country trust estates 136 102AAF Public unit trusts 139 102AAG When entity is in a position to control a trust estate 140 102AAH Non-resident family trusts 141 102AAJ Transfer of property or services 144 102AAK Deemed transfers of property or services to trust estate 144 102AAL Division not to apply to transfers by trustees of deceased estates 148 Subdivision B-Payment of interest by taxpayer on distributions from certain non-resident trust estates 149 102AAMPayment of interest by taxpayer on distributions from certain non-resident trust estates 149 Subdivision D-Accruals system of taxation of certain non-resident trust estates 159 102AAS Object of Subdivision 159 102AAT Accruals system of taxation-attributable taxpayer 159 102AAU Attributable income of a trust estate 163 102AAV Double tax agreements to be disregarded 167 102AAWCertain provisions to be disregarded in calculating attributable income 167 102AAY Modified application of trading stock provisions 168 102AAZ Modified application of depreciation provisions 168 102AAZAModified application of Division 13 of Part III 169 102AAZBGeneral modifications-CGT 169 102AAZBAModified application of CGT-effect of certain changes of residence 170 102AAZCModified application of loss provisions-pre-1990-91 losses 171 102AAZDAssessable income of attributable taxpayer to include attributable income of trust estate to which taxpayer has transferred property or services 171 102AAZEAccruals system of taxation does not apply to small amounts 176 102AAZFOnly resident partners, beneficiaries etc. liable to be assessed as a result of attribution 176 102AAZGKeeping of records 177 Division 6AA-Income of certain children 179 102AA Interpretation 179 102AB Application of Division 180 102AC Persons to whom Division applies 180 102AD Taxable income to which Division applies 183 102AE Eligible assessable income 183 102AF Employment income and business income 188 102AG Trust income to which Division applies 189 102AGA Transfer of property as the result of a family breakdown 193 Division 6A-Alienation of income 196 102A Interpretation 196 102B Certain income transferred for short periods to be included in assessable income of transferor 197 102C Effect of certain transfers of rights to receive income from property 199 102CA Consideration in respect of transfer to be included in assessable income of transferor in certain cases 200 Division 6B-Income of certain unit trusts 202 102D Interpretation 202 102E Prescribed arrangements 204 102F Eligible unit trusts 205 102G Public unit trusts 206 102H Resident unit trusts 210 102J Corporate unit trusts 210 102K Taxation of net income of corporate unit trust 211 102L Modified application of Act in relation to certain unit trusts 211 Division 6C-Income of certain public trading trusts 216 102M Interpretation 216 102N Trading trusts 219 102NA Certain interposed trusts not trading trusts 219 102P Public unit trusts 220 102Q Resident unit trusts 225 102R Public trading trusts 225 102S Taxation of net income of public trading trust 227 102T Modified application of Act in relation to certain unit trusts 227 Division 6D-Provisions relating to certain closely held trusts 232 Subdivision A-Overview 232 102UA What this Division is about 232 Subdivision B-Interpretation 232 102UB Definitions-general 232 102UC Closely held trust 233 102UD Trustee beneficiary 234 102UE Meaning of untaxed part 235 102UG Correct TB statement 235 102UH TB statement period 236 102UI Tax-preferred amount 236 102UJ Extended concept of present entitlement to capital of a trust 236 Subdivision C-Trustee beneficiary non-disclosure tax on share of net income 237 102UK Trustee beneficiary non-disclosure tax where no correct TB statement 237 102UL Exclusion of directors of closely held trust from liability to pay tax 239 102UM Trustee beneficiary non-disclosure tax where share is distributed to trustee of closely held trust 240 Subdivision D-Payment etc. of trustee beneficiary non-disclosure tax 241 102UN Amount of trustee beneficiary non-disclosure tax reduced by notional tax offset 241 102UO Payment of trustee beneficiary non-disclosure tax 241 102UP Late payment of trustee beneficiary non-disclosure tax 242 102UR Notice of liability 242 102URA Request for notice of liability 243 102US Evidentiary effect of notice of liability 244 102USA Recovery of trustee beneficiary non-disclosure tax from trustee beneficiaries providing incorrect information etc. to head trustee 244 Subdivision E-Making correct TB statement about trustee beneficiaries of tax-preferred amounts 246 102UT Requirement to make correct TB statement about trustee beneficiaries of tax-preferred amounts 246 Subdivision F-Special provisions about tax file numbers 247 102UU Trustee beneficiary may quote tax file number to trustee of closely held trust 247 102UV Trustee of closely held trust may record etc. tax file number 247 Division 7-Private companies 249 102V Application of Division to non-share dividends 249 103 Interpretation 249 103A Private companies 250 109 Excessive payments to shareholders, directors and associates deemed to be dividends 260 Division 7A-Distributions to entities connected with a private company 261 Subdivision A-Overview of this Division 261 109B Simplified outline of this Division 261 Subdivision AA-Application of Division to non-share equity interests 262 109BA Application of Division to non-share dividends 262 Subdivision B-Private company payments, loans and debt forgiveness are treated as dividends 262 109C Payments treated as dividends 262 109D Loans treated as dividends 263 109E Amalgamated loan from a previous year treated as dividend if minimum repayment not made 266 109F Forgiven debts treated as dividends 269 Subdivision C-Forgiven debts that are not treated as dividends 271 109G Debt forgiveness that does not give rise to a dividend 271 Subdivision D-Payments and loans that are not treated as dividends 273 109H Simplified outline of this Subdivision 273 109J Payments discharging pecuniary obligations not treated as dividends 274 109K Inter-company payments and loans not treated as dividends 274 109L Certain payments and loans not treated as dividends 274 109M Loans made in the ordinary course of business on arm's length terms not treated as dividends 275 109N Loans meeting criteria for minimum interest rate and maximum term not treated as dividends 275 109NA Certain liquidator's distributions and loans not treated as dividends 277 109NB Loans to purchase shares under employee share schemes not treated as dividends 277 109P Amalgamated loans not treated as dividends in the year they are made 277 109Q Commissioner may allow amalgamated loan not to be treated as dividend 278 109R Some payments relating to loans not taken into account 279 Subdivision DA-Demerger dividends not treated as dividends 281 109RA Demerger dividends not treated as dividends 281 Subdivision DB-Other exceptions 281 109RB Commissioner may disregard operation of Division or allow dividend to be franked 281 109RC Dividend may be franked if taken to be paid because of family law obligation 283 109RD Commissioner may extend period for repayments of amalgamated loan 283 Subdivision E-Payments and loans through interposed entities 284 109S Simplified outline of this Subdivision 284 109T Payments and loans by a private company to an entity through one or more interposed entities 285 109U Payments and loans through interposed entities relying on guarantees 286 109UA Certain liabilities under guarantees treated as payments 287 109V Amount of private company's payment to target entity through one or more interposed entities 288 109W Private company's loan to target entity through one or more interposed entities 289 109X Operation of Subdivision D in relation to payment or loan 290 Subdivision EA-Unpaid present entitlements 291 109XA Payments, loans and debt forgiveness by a trustee in favour of a shareholder etc. of a private company with an unpaid present entitlement 291 109XB Amounts included in assessable income 294 109XC Modifications 295 Subdivision F-General rules applying to all amounts treated as dividends 296 109Y Proportional reduction of dividends so they do not exceed distributable surplus 296 109Z Characteristics of dividends taken to be paid under this Division 298 109ZA No dividend taken to be paid for withholding tax purposes 299 109ZB Amount treated as dividend is not a fringe benefit 299 109ZC Treatment of dividend that is reduced on account of an amount taken under this Division to be a dividend 300 Subdivision G-Defined terms 301 109ZD Defined terms 301 109ZE Interpretation rules about entities 302 Division 9-Co-operative and mutual companies 303 117 Co-operative companies 303 118 Company not co-operative if less than 90% of business with members 304 119 Sums received to be taxed 304 120 Deductions allowable to co-operative company 304 121 Mutual insurance associations 306 Division 9AA-Demutualisation of insurance companies and affiliates 307 Subdivision A-What this Division is about 307 121AA What this Division is about 307 Subdivision B-Key concepts and related definitions 307 121AB Insurance company definitions 307 121AC Mutual affiliate company 308 121AD Demutualisation and demutualisation resolution day 308 121AE Demutualisation methods, the policyholder/member group and the listing period 309 121AEA Replacement of policyholders by persons exercising certain rights 312 121AF Demutualisation method 1 312 121AG Demutualisation method 2 313 121AH Demutualisation method 3 316 121AI Demutualisation method 4 318 121AJ Demutualisation method 5 320 121AK Demutualisation method 6 322 121AL Demutualisation method 7 324 121AM Embedded value of a mutual life insurance company 326 121AN Net tangible asset value of a general insurance company or mutual affiliate company 328 121AO Treasury bond rate, capital reserve adequacy level, eligible actuary and security 330 121AP Subsidiary and wholly-owned subsidiary 331 121AQ Other definitions 331 121AR List of definitions 332 Subdivision C-Tax consequences of demutualisation 333 121AS CGT consequences of demutualisation 333 121AT Other tax consequences of demutualisation 352 Division 9A-Offshore banking units 363 Subdivision A-Object and simplified outline 363 121A Object 363 121B Simplified outline 363 Subdivision B-Interpretation 364 121C Interpretation 364 121D Meaning of OB activity 366 121DA Meaning of expressions relevant to investment activity 371 121E Meaning of offshore person 372 121EA OBU requirement 372 121EB Internal financial dealings of an OBU 372 121EC Meaning of OBU resident-owner money 373 121ED Meaning of trade with a person 373 121EE Definitions relating to assessable income of an OBU 373 121EF Definitions relating to allowable deductions of an OBU 375 Subdivision C-Operative provisions 376 121EG Reduction of assessable OB income, allowable OB deductions and foreign income tax paid 376 121EH Loss of special treatment where excessive use of non-OB money 377 121EJ Source of income derived from OB activities 378 121EK Deemed interest on 90% of certain OBU resident-owner money 378 121EL Exemption of income etc. of OBU offshore investment trusts 379 121ELA Exemption of income etc. of overseas charitable institutions 380 121ELB Adjustment of capital gains and losses from disposal of units in OBU offshore investment trusts 381 Division 9C-Assessable income diverted under certain tax avoidance schemes 383 121F Interpretation 383 121G Diverted income and diverted trust income 385 121H Assessment of diverted income and diverted trust income 392 121J Ascertainment of diverted income or diverted trust income deemed to be an assessment 392 121K Application of International Tax Agreements Act 392 121L Division applies notwithstanding exemption under other laws 393 79A Rebates for residents of isolated areas (1) For the purpose of granting to residents of the prescribed area an income tax concession in recognition of the disadvantages to which they are subject because of the uncongenial climatic conditions, isolation and high cost of living in Zone A and, to a lesser extent, in Zone B, in comparison with parts of Australia not included in the prescribed area, a taxpayer (not being a company or a taxpayer in the capacity of a trustee) who is a resident of the prescribed area in the year of income is entitled, in his assessment in respect of income of that year of income, to a rebate of tax ascertained in accordance with this section. (2) Subject to subsections (2A) and 79B(4), the rebate allowable under this section in the assessment of a taxpayer in respect of income of the year of income is: (a) where the taxpayer is a resident of the special area in Zone A, or of the special area in Zone B, in the year of income-$1,173 increased by 50% of the relevant rebate amount in relation to the taxpayer in relation to the year of income; (d) where the taxpayer is a resident of Zone A in the year of income but has not resided or actually been in the special area in Zone A or the special area in Zone B during any part of the year of income-$338 increased by 50% of the relevant rebate amount in relation to the taxpayer in relation to the year of income; (e) where the taxpayer is a resident of Zone B in the year of income but has not resided or actually been in Zone A or the special area in Zone B during any part of the year of income- $57 increased by 20% of the relevant rebate amount in relation to the taxpayer in relation to the year of income; or (f) in any other case-such amount as, in the opinion of the Commissioner, is reasonable in the circumstances, being an amount not greater than the amount of the rebate to which the taxpayer would have been entitled under this section if paragraph (a) had applied to him in respect of the year of income and not less than the amount of rebate to which he would have been so entitled if paragraph (e) had so applied to him. (2A) The amount of any rebate that would, but for this subsection, be allowable to a taxpayer under this section in his assessment in respect of income of a year of income shall be reduced by the amount of any prescribed allowance paid to the taxpayer in respect of the year of income. (3) Any alteration of the boundaries of any area referred to in Schedule 2 made (otherwise than by an amendment of this Act) after the commencement of this section shall not affect the operation of this section. (3A) This section has effect subject to section 23AB. (3B) For the purposes of this section, a taxpayer is a resident of a particular area, being the prescribed area, Zone A, Zone B, the special area in Zone A or the special area in Zone B (in this subsection referred to as the relevant area) in a year of income if: (a) the taxpayer resided in the relevant area in the year of income for a period of more than one-half of the year of income; (b) the taxpayer was actually in the relevant area in the year of income for a period of more than one-half of the year of income; (c) the taxpayer died during the year of income and at the date of his death resided in the relevant area; (d) the following conditions are satisfied: (i) the taxpayer resided, or actually was, in the relevant area in the year of income for a period of not more than one-half of the year of income; (ii) the taxpayer resided, or actually was, in the relevant area in the next preceding year of income for a period of not more than one-half of the next preceding year of income; (iii) for the purposes of this section, the taxpayer was not a resident of the relevant area in the next preceding year of income; and (iv) the sum of: (A) the number of days in the period mentioned in subparagraph (i); and (B) the number of days in the period mentioned in subparagraph (ii), other than days included in a period to which subsection 23AB(8) or 79B(3) applied in relation to the taxpayer in relation to the next preceding year of income; exceeds 182; or (e) the following conditions are satisfied: (i) the taxpayer resided in the relevant area in the year of income for a period of not more than one-half of the year of income, being a period that included the first day of the year of income; (ii) the taxpayer resided in the relevant area, in a relevant preceding year of income, for a period of not more than one- half of that relevant preceding year of income; (iii) for the purposes of this section, the taxpayer was not a resident of the relevant area in that relevant preceding year of income; (iv) the sum of: (A) the number of days in the period mentioned in subparagraph (i); and (B) the number of days in the period mentioned in subparagraph (ii), other than days included in a period to which subsection 23AB(8) or 79B(3) applied in relation to the taxpayer in relation to that relevant preceding year of income; exceeds 182; and (v) the taxpayer resided in the relevant area continuously from the commencement of the period mentioned in subparagraph (ii) until the end of the period mentioned in subparagraph (i). (3C) In subsection (3B), a reference to a taxpayer residing, or actually being, in a particular area in a year of income for a period of more than, or not more than, one-half of the year of income is a reference to the taxpayer: (a) residing, or actually being, in that area in the year of income for one period of more than, or not more than, as the case may be, one-half of the year of income; or (b) residing, or actually being, in that area in the year of income for 2 or more periods the aggregate of the lengths of which is more than, or not more than, as the case may be, one-half of the year of income. (3D) For the purposes of this section: (a) the special area within Zone A or Zone B is constituted by: (i) the points in that Zone that were not, as at 1 November 1981, situated at a distance of 250 kilometres or less by the shortest practicable surface route, from the centre point of the nearest urban centre (whether or not within that Zone) with a census population of not less than 2,500; and (ii) the points in that Zone that were within the special area in that Zone for the purposes of this section as in force immediately before the commencement of the Income Tax Assessment Amendment Act (No. 4) 1984; and (b) the distance, by the shortest practicable surface route, between a point in Zone A or Zone B and the centre point of an urban centre is: (i) where there is only one location within that urban centre from which distances between the urban centre and other places are usually measured-the distance, by the shortest practicable surface route, between that point in Zone A or Zone B and that location; and (ii) where there are 2 or more locations within that urban centre from which distances between parts of the urban centre and other places are usually measured-the distance, by the shortest practicable surface route, between that point in Zone A or Zone B and the one of those locations that is in the principal one of those parts. (3E) For the purposes of this section other than this subsection, the Commissioner may, if he considers it appropriate having regard to all the circumstances, treat a point in Zone A or Zone B that is not in the special area in that Zone but is adjacent to or in close proximity to the special area in that Zone as being a point in the special area in that Zone. (3F) For the purposes of this section, the census population of Nhulunbuy is taken to be less than 2,500. (4) In this section: census population, in relation to an urban centre, means the population of that urban centre specified in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981, being the results published by the Australian Bureau of Statistics in the documents entitled "Persons and Dwellings in Local Government Areas and Urban Centres". prescribed allowance means: (a) so much of a payment under the Social Security Act 1991 or the Veterans' Entitlements Act 1986 as was included in the payment by way of remote area allowance; or (b) so much of an exceptional circumstances relief payment, or a payment of farm help income support, under the Farm Household Support Act 1992 as would have been included by way of remote area allowance if it had been a payment of newstart allowance under the Social Security Act 1991 instead of an exceptional circumstances relief payment, or a payment of farm help income support. relevant preceding year of income, in relation to a year of income, means any of the next 4 preceding years of income other than the immediately preceding year of income. relevant rebate amount, in relation to a taxpayer in relation to a year of income, means the sum of the following rebates (if any): (a) any rebate to which the taxpayer would be entitled under section 159K, apart from subsection 159K(1A); (aa) any rebate to which the taxpayer would be entitled under section 159L, apart from subsections 159L(3A), (5A) and (5B); (b) any rebate to which the taxpayer is entitled under section 159J in respect of a dependant included in class 5 or 6 in the table in subsection 159J(2); (ba) any rebate to which the taxpayer would be entitled under section 159J in respect of a dependant included in class 2 in the table in subsection 159J(2), apart from subsections 159J(1AA), (3AA) and (3AB); (c) any rebate to which the taxpayer would, disregarding subsection 159J(1A), be entitled under section 159J in respect of a dependant included in class 3 or 4 in the table in subsection 159J(2); (d) any rebate to which the taxpayer would be entitled under section 159J in respect of a dependant included in class 1 in the table in subsection 159J(2) (ignoring subsections 159J(1AA), (3AA) and (3AB)) if subsection 159J(1B) also included a reference to any dependant included in class 1 of that table and the amount applicable to class 1 of that table were $2,440. Note 1: This definition lets a taxpayer include the dependent spouse rebate (without child), the child-housekeeper rebate or the housekeeper rebate for the purpose of working out the relevant rebate amount under this section, even if the taxpayer or the taxpayer's spouse is eligible for family tax benefit at the Part B rate for the whole or part of a year. Note 2: Another effect of the definition (see paragraph (d)) is to let a taxpayer include the dependent spouse rebate (with child), despite its abolition by the A New Tax System) (Consequential and Related Measures) Act (No. 1) 1999, for the purpose of working out the relevant rebate amount. surface route means a route other than an air route. the prescribed area means the area comprised in Zone A and Zone B. urban centre means an area that is described as an urban centre or bounded locality in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981, being the results published by the Australian Bureau of Statistics in the documents entitled "Persons and Dwellings in Local Government Areas and Urban Centres". Zone A means the area described in Part I of Schedule 2. Zone B means the area described in Part II of Schedule 2. 79B Rebates for members of Defence Force serving overseas (1) Subject to this section, a taxpayer who, during the year of income, serves as a member of the Defence Force at an overseas locality is entitled, in his assessment in respect of income of the year of income, to a rebate of tax ascertained in accordance with this section. (1A) A taxpayer is not entitled to a rebate under this section in relation to service: (a) as or under an attachè at an Australian Embassy or Legation in an overseas locality at a time as at which that locality was, or is deemed to have been, a specified locality for the purposes of this subsection; or (b) with the South-East Asia Treaty Organization Military Planning Office. (1B) Where the Chief of the Defence Force or a service chief or a person authorized by a chief of staff to give certificates under this subsection certifies, and the Treasurer is satisfied, that any service of a taxpayer in any locality was or will be performed in circumstances similar to those in which any service referred to in subsection (1A) is performed, the taxpayer is not entitled to a rebate under this section in relation to that service. (2) Subject to the succeeding provisions of this section, the rebate allowable under this section in the assessment of a taxpayer in respect of income of the year of income is: (a) where the total period of service of the taxpayer at overseas localities during the year of income is more than one-half of the year of income, or where the taxpayer dies at an overseas locality during the year of income-an amount equal to the sum of: (i) $338; and (ii) an amount equal to 50% of the concessional rebate amount; or (b) in any other case-such amount as, in the opinion of the Commissioner, is reasonable in the circumstances, being an amount not greater than the amount of the rebate to which the taxpayer would have been entitled under this section if paragraph (a) had applied to him in respect of the year of income. (3) For the purposes of subsection (2), the total periods of service of the taxpayer in any year of income at overseas localities shall be deemed to include any period of service of the taxpayer as a member of the Defence Force in that year of income in the prescribed area. (3A) For the purposes of subsection (2), the total periods of service of the taxpayer in any year of income at overseas localities shall be deemed not to include any period of service of the taxpayer in respect of which an exemption from income tax applies under section 23AC, 23AD or 23AG. (4) The aggregate of the rebates allowable under this section and section 23AB or under this section and section 79A in the assessment of a taxpayer in respect of income of a year of income shall not exceed an amount equal to the sum of: (a) $338; and (b) an amount equal to 50% of the concessional rebate amount. (4A) Where: (a) but for subsection (4) and this subsection, a rebate would be allowable under this section and a rebate would be allowable under section 79A in the assessment of a taxpayer in respect of income of a year of income; and (b) the rebate allowable under section 79A exceeds an amount equal to the sum of: (i) $338; and (ii) an amount equal to 50% of the concessional rebate amount; the taxpayer is not entitled to a rebate under this section in that assessment and subsection (4) does not apply in relation to that assessment. (5) For the purposes of this section the Treasurer may, by writing signed by him and deposited with the Commissioner, declare that a locality outside Australia specified in the declaration shall: (a) by reason of the uncongenial nature of service in that locality and the isolation of the locality, be, or be deemed to have been, as from a date, or during a period, (whether before or after the date of the declaration) specified in the declaration, a locality in relation to which this section applies; or (b) as from a date (whether before or after the date of the declaration) specified in the declaration, cease, or be deemed to have ceased, to be such a locality; and this section shall apply, or be deemed to have applied, and shall cease to apply, or be deemed to have ceased to apply, in relation to any such locality accordingly. (5A) The Treasurer may, by writing signed by him and deposited with the Commissioner, declare that an overseas locality specified in the declaration shall become, or be deemed to have become, on a specified date, or shall cease, or be deemed to have ceased, on a specified date, to be, a specified locality for the purposes of subsection (1A). (5B) Nothing in section 170 prevents the amendment of an assessment at any time for the purpose of allowing a rebate to which the taxpayer has become entitled under this section after the making of the assessment. (6) For the purpose of this section: concessional rebate amount, in relation to a taxpayer in relation to a year of income, means the sum of the following rebates (if any): (a) any rebate to which the taxpayer would be entitled under section 159K, apart from subsection 159K(1A); (aa) any rebate to which the taxpayer would be entitled under section 159L, apart from subsections 159L(3A), (5A) and (5B); (b) any rebate to which the taxpayer is entitled under section 159J in respect of a dependant included in class 5 or 6 in the table in subsection 159J(2); (ba) any rebate to which the taxpayer would be entitled under section 159J in respect of a dependant included in class 2 in the table in subsection 159J(2), apart from subsections 159J(1AA), (3AA) and (3AB); (c) any rebate to which the taxpayer would, disregarding subsection 159J(1A), be entitled under section 159J in respect of a dependant included in class 3 or 4 in the table insubsection 159J(2); (d) any rebate to which the taxpayer would be entitled under section 159J in respect of a dependant included in class 1 in the table in subsection 159J(2) (ignoring subsections 159J(1AA), (3AA) and (3AB)) if subsection 159J(1B) also included a reference to any dependant included in class 1 of that table and the amount applicable to class 1 of that table were $2,440. Note 1: This definition lets a taxpayer include the dependent spouse rebate (without child), the child-housekeeper rebate or the housekeeper rebate for the purpose of working out the concessional rebate amount under this section, even if the taxpayer or the taxpayer's spouse is eligible for family tax benefit at the Part B rate for the whole or part of a year. Note 2: Another effect of this definition (see paragraph (d)) is to let a taxpayer include the dependent spouse rebate (with child), despite its abolition by the A New Tax System (Family Assistance) (Consequential and Related Measures) Act (No. 1) 1999, for the purpose of working out the concessional rebate amount. locality means an area of land or waters or an area of land and waters. overseas locality means, in relation to service during any period or death at any time, a locality in relation to which, during that period or at that time, this section applies or is deemed to have applied; and the prescribed area has the same meaning as that expression has in section 79A. 82 Double deductions Where the profit arising from the sale of any property is included in the assessable income of any person, or where the loss arising from the sale is an allowable deduction, and any expenditure incurred by him in connexion with that property has been allowed or is allowable as a deduction under this Act, that expenditure shall not be deducted in ascertaining the amount of the profit or loss. 82A Deductions for expenses of self-education (1) Where a deduction is, or but for this section would be, allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of a year of income in respect of expenses of self-education, the deduction, or the aggregate of the deductions, so allowable to the taxpayer in respect of those expenses shall not be greater than the amount by which the net amount of expenses of self-education exceeds $250. (2) In this section: educational assistance means amounts (other than amounts in the nature of an allowance for maintenance or accommodation) payable under a scheme for the provision by the Commonwealth of assistance for secondary education, technical or tertiary education or post- graduate study. expenses of self-education means expenses necessarily incurred by the taxpayer for or in connection with a prescribed course of education but does not include: (a) a payment made to an institution of higher education to which Chapter 4 of the Higher Education Funding Act 1988 applies in respect of a contribution payable under that Chapter; or (ab) a payment made to the Open Learning Agency of Australia in respect of any charge payable in respect of a unit of study undertaken by the taxpayer for the purposes of an approved course of study within the meaning of Chapter 5 of the Higher Education Funding Act 1988; or (b) a payment made in respect of, or in respect of the reduction or discharge of, any indebtedness to the Commonwealth under Chapter 5A of that Act; or (ba) a student contribution amount within the meaning of the Higher Education Support Act 2003 paid to a higher education provider (within the meaning of that Act); or (bb) a payment made in respect of, or in respect of the reduction or discharge of, any indebtedness to the Commonwealth under Chapter 4 of that Act; or (c) a payment made in respect of, or in respect of the reduction or discharge of, any indebtedness to the Commonwealth or to a participating corporation under Chapter 2B of the Social Security Act 1991 or Part 4A of the Student Assistance Act 1973. net amount of expenses of self-education means the amount ascertained by subtracting from the total amount of expenses of self-education incurred by the taxpayer in the year of income the sum of: (a) any payment or payments of educational assistance that were capable of being claimed in the year of income by the taxpayer or by another person in respect of the taxpayer other than: (i) a payment the amount of which has been, or will be, included in the assessable income of the taxpayer of any year of income; or (ii) a payment that was capable of being claimed in a preceding year of income; and (b) any payment or payments (other than a payment the amount of which has been, or will be, included in the assessable income of the taxpayer of any year of income) received by the taxpayer, or that the taxpayer was entitled to receive, in the year of income, from the taxpayer's employer, or from any other person, in respect of: (i) expenses of self-education that were incurred by the taxpayer during the year of income; or (ii) expenses of self-education in respect of which a deduction has been allowed, or is allowable, or in respect of which a rebate of tax has been allowed, or is allowable, in an assessment in respect of income derived by the taxpayer in a preceding year of income. prescribed course of education means a course of education provided by a school, college, university or other place of education, and undertaken by the taxpayer for the purpose of gaining qualifications for use in the carrying on of a profession, business or trade or in the course of any employment. Subdivision CB-Regional Headquarters (RHQs) 82C Object The object of this Subdivision is to provide a deduction for certain expenditure incurred by approved companies in establishing a regional headquarters in Australia. 82CA Deduction for setup costs of RHQ companies RHQ setup costs incurred on or after 1 July 1994 by an RHQ company in a year of income are an allowable deduction from the assessable income of the RHQ company of the year of income. 82CB Interpretation (1) In this Subdivision: associated company has the meaning given by section 82CC. management related services include the following: (a) finance and treasury services; (b) business planning services; (c) marketing services; (d) accounting services; (e) research and development services. RHQ company means a company that the Treasurer, under section 82CE, has determined to be an RHQ company. RHQ setup costs means expenditure (whether or not of a capital nature) incurred by an RHQ company: (a) both: (i) in setting up the facilities referred to in subsection 82CD(1); and (ii) in the period starting 12 months before, and ending 12 months after, the company first derives assessable income from the provision of regional headquarters support from those facilities; or (b) in reimbursing expenditure incurred by a non-resident associated company of the RHQ company if the latter expenditure would have been covered by paragraph (a) if it had instead been incurred by the RHQ company at the time when it was incurred by the associated company; but does not include: (c) costs incurred in connection with feasibility studies in relation to the setting up of facilities in Australia to provide regional headquarters support; or (d) costs incurred in connection with moving facilities that provide regional headquarters support from one location in Australia to another location in Australia; or (e) the cost of depreciating assets, equipment, land, buildings or similar items. (2) A company provides regional headquarters support if: (a) the company provides to an associated company that is located in a country other than Australia; or (b) a part of the company provides to another part of the company that is located in a country other than Australia; any of the following: (c) management related services; or (d) data services; or (e) software support services. (3) A reference in this section to the provision of data services to a company, or a part of a company, is a reference to: (a) the substantial input, transmission or manipulation of data; or (b) the production of information from data; for, or on behalf of, that company or that part of that company. (4) A reference in this section to the provision of software support services to a company, or a part of a company, is a reference to the provision, to clients of that company or that part of that company, of advice and assistance in relation to computer software sold by that company or that part of that company. 82CC Associated companies For the purposes of this Subdivision, a company is an associated company of another company if: (a) either company controls at least 10% of the votes in the other company (either directly or through one or more interposed companies, partnerships or trust estates); or (b) a third company is an associated company (including by one or more applications of this paragraph) of both of the companies. 82CD Application to become an RHQ company (1) A company may, in writing, apply to the Treasurer to become an RHQ company if the company intends to establish facilities in Australia mainly for the purpose of providing regional headquarters support. (2) The Treasurer must publish the address to which applications must be sent. 82CE Determination of RHQ companies (1) Subject to subsection (3), the Treasurer may, on application by a company under section 82CD, determine, by legislative instrument, that the company is an RHQ company for the purposes of this Subdivision. (2) The determination must: (a) specify the day when the company commences to be an RHQ company; and (b) contain any other information the Treasurer considers appropriate. (3) A determination of the Treasurer under subsection (1): (a) may only be made if the Treasurer is satisfied that the company has the intention mentioned in subsection 82CD(1); and (b) must be made in accordance with guidelines determined by the Treasurer under this section. (4) The Treasurer must, by legislative instrument, determine guidelines for the making of determinations under subsection (1). The guidelines may require the Treasurer to take into account: (a) specified criteria; or (b) recommendations of particular bodies; or (c) any other factors. Subdivision D-Losses and outgoings incurred under certain tax avoidance schemes 82KH Interpretation (1) In this Subdivision, unless the contrary intention appears: additional benefit, in relation to an amount of eligible relevant expenditure, means the additional benefit, or the aggregate of the additional benefits, as the case may be, referred to in paragraph (1F)(b) in relation to that eligible relevant expenditure. agreement means any agreement, arrangement, understanding or scheme, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings. associate, in relation to a taxpayer, means: (a) in the case of a taxpayer who is a natural person, other than a taxpayer in the capacity of a trustee: (i) a relative of the taxpayer; (ii) a partner of the taxpayer; (iii) if a person who is an associate of the taxpayer by virtue of subparagraph (ii) is a natural person-the spouse or a child of that person; (iv) a trustee of a trust estate where the taxpayer or another person who is an associate of the taxpayer by virtue of another subparagraph of this paragraph benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the trust, either directly or through any interposed companies, partnerships or trusts; or (v) a company where: (A) the company is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the taxpayer, of another person who is an associate of the taxpayer by virtue of another subparagraph of this paragraph, of a company that is an associate of the taxpayer by virtue of another application of this subparagraph or of any 2 or more such persons; or (B) the taxpayer is, the persons who are associates of the taxpayer by virtue of sub-subparagraph (A) and the preceding subparagraphs of this paragraph are, or the taxpayer and the persons who are associates of the taxpayer by virtue of that sub-subparagraph and those subparagraphs are, in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the company; (b) in the case of a taxpayer being a company, other than a taxpayer in the capacity of a trustee: (i) a partner of the taxpayer; (ii) if a person who is an associate of the taxpayer by virtue of subparagraph (i) is a natural person-the spouse or a child of that person; (iii) a trustee of a trust estate where the taxpayer or another person who is an associate of the taxpayer by virtue of another subparagraph of this paragraph benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the trust, either directly or through any interposed companies, partnerships or trusts; (iv) another person where: (A) the taxpayer company is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person, or of that person and another person or other persons, whether those directions, instructions or wishes are communicated directly to the taxpayer company or its directors, or through any interposed companies, partnerships or trusts; or (B) that person is, or that person and the persons who, if that person were the taxpayer, would be associates of that person by virtue of paragraph (a), by virtue of sub- subparagraph (A), by virtue of another subparagraph of this paragraph or by virtue of paragraph (c) are, in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the taxpayer company; (v) another company where: (A) the other company is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the taxpayer company, of a person who is an associate of the taxpayer company by virtue of another subparagraph of this paragraph, of a company that is an associate of the taxpayer company by virtue of another application of this subparagraph or of any 2 or more such persons; or (B) the taxpayer company is, the persons who are associates of the taxpayer company by virtue of sub-subparagraph (A) and the other subparagraphs of this paragraph are, or the taxpayer company and the persons who are associates of the taxpayer company by virtue of that sub-subparagraph and those subparagraphs are, in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the other company; or (vi) any other person who, if a third person who is an associate of the taxpayer company by virtue of subparagraph (iv) were the taxpayer, would be an associate of that third person by virtue of paragraph (a), by virtue of another subparagraph of this paragraph or by virtue of paragraph (c); (c) in the case of a taxpayer in the capacity of a trustee of a trust estate: (i) any person who benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the trust estate, either directly or through any interposed companies, partnerships or trusts; (ii) where a person who is an associate of the taxpayer by virtue of subparagraph (i) is a natural person-any person who, if that natural person were the taxpayer, would be an associate of that natural person by virtue of paragraph (a) or this paragraph; or (iii) where a person who is an associate of the taxpayer by virtue of subparagraph (i) or (ii) is a company-any person who, if that company were the taxpayer, would be an associate of that company by virtue of paragraph (b) or this paragraph; or (d) in the case of a taxpayer being a partnership: (i) a partner in the partnership; (ii) where any partner in the partnership is a natural person-any person who, if that natural person were the taxpayer, would be an associate of that natural person by virtue of paragraph (a) or (c); or (iii) where any partner in the partnership is a company-any person who, if the company were the taxpayer, would be an associate of the company by virtue of paragraph (b) or (c). consumable supplies means property other than: (a) trading stock; or (b) choses in action. expected tax saving, in relation to an amount of eligible relevant expenditure incurred by a taxpayer, means: (a) where only one amount is, under subsection (1B), a tax saving amount for the purposes of the application of this definition in relation to the eligible relevant expenditure-that tax saving amount; and (b) where 2 or more amounts are, under subsection (1B), tax saving amounts for the purposes of the application of this definition in relation to the eligible relevant expenditure-the sum of those tax saving amounts. film means an aggregate of images, or of images and sounds, embodied in any material. market research means: (a) the undertaking of research to ascertain the location, extent, value or other characteristics of the market, or the potential market, for goods or services; and (b) the provision of information, advice or assistance in connection with the marketing of particular goods or services or of goods or services generally. property includes a chose in action and also includes any estate, interest, right or power, whether at law or in equity, in or over property. relevant expenditure, in relation to a taxpayer, means: (a) expenditure in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 25-25 (Borrowing expenses) of the Income Tax Assessment Act 1997; (b) expenditure in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 25-30 (Expenses of discharging a mortgage) of the Income Tax Assessment Act 1997; (c) a loss or outgoing incurred by the taxpayer in the purchase by the taxpayer of property (not being a chose in action) that, for the purposes of the application of this Act in relation to the taxpayer, is trading stock, to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (d) a loss or outgoing incurred by the taxpayer in respect of interest to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (e) a loss or outgoing incurred by the taxpayer in respect of rent to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (f) a bad debt incurred by the taxpayer in respect of money lent by the taxpayer in the course of carrying on a business to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 or section 25-35 of the Income Tax Assessment Act 1997 in respect of the bad debt; (g) a loss or outgoing incurred by the taxpayer in respect of: (i) the production, marketing or distribution of a film; or (ii) the acquisition of a copyright subsisting in a film; to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (h) expenditure incurred by the taxpayer in respect of a unit of industrial property, being a unit of industrial property that relates to copyright subsisting in a film, to the extent to which the amount of that expenditure is taken into account, or would, apart from subsections 124R(2) and (3), be taken into account, in calculating the residual value of the unit of industrial property in ascertaining whether, apart from section 82KL, a deduction would be allowable to the taxpayer under section 124M or 124N in respect of the residual value of the unit of industrial property; (ka) expenditure incurred by the taxpayer in respect of an item of intellectual property (as defined in of the Income Tax Assessment Act 1997) that relates to copyright subsisting in a film, but only to the extent described at the end of this definition; (k) a loss or outgoing incurred by the taxpayer in the purchase of consumable supplies to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (m) a loss or outgoing incurred by the taxpayer in respect of market research to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8- 1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (n) expenditure incurred by the taxpayer in respect of the acquisition of a unit of industrial property, being a licence under a copyright subsisting in computer software, to the extent to which the amount of that expenditure is taken into account, or would, apart from subsection 124R(3) be taken into account, in calculating the residual value of the unit of industrial property in ascertaining whether, apart from section 82KL, a deduction would be allowable to the taxpayer under section 124M or 124N in respect of the residual value of the unit of industrial property; (oa) expenditure incurred by the taxpayer in respect of acquiring an item of intellectual property (as defined in of the Income Tax Assessment Act 1997) that is a licence under a copyright subsisting in computer software, but only to the extent described at the end of this definition; (o) a loss or outgoing or expenditure incurred by the taxpayer by way of commission for collecting assessable income of the taxpayer to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing or the expenditure; (p) a loss or outgoing incurred by the taxpayer in respect of the growing, care or supervision of trees on behalf of the taxpayer to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (pa) a loss or outgoing incurred by the taxpayer in respect of the establishment and tending of trees for felling on behalf of the taxpayer to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 394-10 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (q) a loss or outgoing incurred by the taxpayer for the purpose of increasing the value of shares in a company, being shares held or beneficially owned by the taxpayer as trading stock, to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (r) a loss or outgoing incurred by the taxpayer in respect of: (i) the production by another person of a master sound recording; or (ii) the procuration of the production by another person of a master sound recording; to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing; (s) calls paid by the taxpayer on shares owned by the taxpayer in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under Division 30 (which is about gifts) of the Income Tax Assessment Act 1997; (v) expenditure (other than expenditure to which a preceding paragraph of this definition applies) incurred by the taxpayer in respect of a unit of industrial property to the extent to which the amount of that expenditure is taken into account, or would, apart from subsections 124R(2) and (3), be taken into account, in calculating the residual value of the unit of industrial property in ascertaining whether, apart from section 82KL, a deduction would be allowable to the taxpayer under section 124M or 124N in respect of the residual value of the unit of industrial property; or (wa) expenditure (unless covered by an earlier paragraph of this definition) incurred by the taxpayer in respect of an item of intellectual property (as defined in of the Income Tax Assessment Act 1997), but only to the extent described at the end of this definition; (w) a loss or outgoing (other than a loss or outgoing referred to in subsection 52A(1) or to which a preceding paragraph of this definition applies) incurred by the taxpayer to the extent to which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 8-1 of the Income Tax Assessment Act 1997 in respect of the loss or outgoing. However, paragraph (ka), (oa) or (wa) only covers expenditure to the extent that: (x) it is taken into account in working out under Division 40 of the Income Tax Assessment Act 1997 the adjustable value of the item to the taxpayer in determining whether, apart from section 82KL of this Act, the taxpayer could deduct an amount under that Division for the item for a year of income; or (y) it would be so taken into account apart from item 8 in the table in subsection 40-180(2), or item 1 in the table in subsection 40-190(3) (both about non-arm's length transactions). rent means rent in respect of land or premises. tax avoidance agreement means an agreement that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that a person who, if the agreement had not been entered into or carried out, would have been liable to pay income tax in respect of a year of income would not be liable to pay income tax in respect of that year of income or would be liable to pay less income tax in respect of that year of income than that person would have been liable to pay if the agreement had not been entered into or carried out. unit of industrial property has the same meaning as in Division 10B. (1A) In determining for the purposes of this Subdivision whether an agreement is a tax avoidance agreement, no regard shall be had to a purpose that is a merely incidental purpose. (1AA) A reference in this Subdivision to the incurring by a taxpayer of a bad debt shall be read as a reference to a debt, or a part of a debt, owed to the taxpayer becoming a bad debt. (1AB) A reference in: (a) subsection 82KL(2); or (b) former section 80 in relation to this Subdivision; to the incurring by a taxpayer of a loss or outgoing shall be read as including a reference to the incurring by a taxpayer of a bad debt. (1ABA) This section has the same effect in relation to an allowable deduction under section 63E in respect of the extinguishing of the whole or part of a debt as it has in respect of an allowable deduction under section 8-1 or 25-35 of the Income Tax Assessment Act 1997 in respect of the writing off of the whole or part of a debt as bad. (1AC) In this Subdivision: (a) a reference to a copyright subsisting in a film shall be read as including a reference to: (i) a licence under a copyright subsisting in a film; and (ii) an interest, whether at law or in equity, in respect of a copyright, or in respect of a licence under a copyright, subsisting in a film; and (b) a reference to a licence under a copyright subsisting in computer software shall be read as including a reference to an interest, whether at law or in equity, in a licence under a copyright subsisting in computer software. (1AD) A reference in this Subdivision to a tax benefit being allowed or allowable or not being allowed or allowable in respect of relevant expenditure incurred by a taxpayer shall be read as a reference to: (a) in a case where the relevant expenditure is relevant expenditure to which paragraph (h), (n) or (v) of the definition of relevant expenditure in subsection (1) applies-a deduction being allowed or allowable or not being allowed or allowable, as the case may be, to the taxpayer under section 124M or 124N in respect of the residual value of a unit of industrial property where that residual value would be calculated by reference to the relevant expenditure; and (b) if paragraph (ka), (oa) or (wa) of the definition of relevant expenditure in subsection (1) covers the expenditure-the taxpayer deducting or being able to deduct, or not deducting or not being able to deduct, as appropriate, an amount under Division 40 of the Income Tax Assessment Act 1997 for an item of intellectual property for a year of income because the taxpayer's adjustable value of the item would be calculated under that Division by reference to the relevant expenditure; and (d) in any other case-a deduction being allowed or allowable or not being allowed or allowable, as the case may be, to the taxpayer in respect of the relevant expenditure. (1B) For the purposes of the application of the definition of expected tax saving in subsection (1) in relation to an amount of eligible relevant expenditure incurred by a taxpayer: (a) where: (i) if a tax benefit were not allowable in respect of any part of that eligible relevant expenditure, a person (whether the taxpayer or another person and whether in the capacity of a trustee of a trust estate or otherwise) would be liable to pay income tax in respect of a year of income; and (ii) if a tax benefit or tax benefits were allowable under this Act in respect of that eligible relevant expenditure, that person would be liable to pay a lesser amount of income tax in respect of that year of income; the amount by which the amount of the tax referred to in subparagraph (i) exceeds the amount of the tax referred to in subparagraph (ii) is a tax saving amount; and (b) where: (i) if a tax benefit were not allowable in respect of any part of that eligible relevant expenditure, a person (whether the taxpayer or another person and whether in the capacity of a trustee of a trust estate or otherwise) would be liable to pay income tax in respect of a year of income; and (ii) if a tax benefit or tax benefits were allowable under this Act in respect of that eligible relevant expenditure, that person would not be liable to pay income tax in respect of that year of income; the amount of the tax referred to in subparagraph (i) is a tax saving amount. (1BA) In the application of subsection (1B) in determining whether there is a tax saving amount in relation to an amount of eligible relevant expenditure incurred by a taxpayer in a case where, if a tax benefit or tax benefits were allowable in respect of that eligible relevant expenditure, a person (whether the taxpayer or another person and whether in the capacity of a trustee of a trust estate or otherwise) would: (a) have a tax loss for a year of income that the person would not have; or (b) have a greater tax loss for a year of income than the person would have; if a tax benefit were not allowable in respect of any part of that eligible relevant expenditure, apply Division 36 and Subdivision 375-G of the Income Tax Assessment Act 1997 as if the amount were relevant expenditure but not eligible relevant expenditure. (1D) Subject to subsection (1E), where, in respect of any 2 or more amounts of eligible relevant expenditure (whether incurred by one taxpayer or by 2 or more taxpayers and whether incurred in one year of income or in 2 or more years of income), the following conditions are satisfied, namely: (a) if subsection (1B) were applied in relation to one of those amounts of eligible relevant expenditure in relation to a person (whether or not that person is the person or one of the persons who incurred the eligible relevant expenditure) in relation to a year of income on the assumption that no tax benefit is or was allowable in respect of any part of the other amount of eligible relevant expenditure, or in respect of any part of any of the other amounts of eligible relevant expenditure, as the case may be, the tax saving amount determined in accordance with that subsection would be greater than the tax saving amount that would be determined in accordance with that subsection in relation to that amount of eligible relevant expenditure in relation to that person in relation to that year of income if that subsection were applied on the assumption that a tax benefit or tax benefits were allowable under this Act in respect of the other amount of eligible relevant expenditure, or in respect of each of the other amounts of eligible relevant expenditure, as the case may be; and (b) if paragraph (a) of this subsection were applied in relation to that person in relation to that year of income in relation to the other amount of eligible relevant expenditure, or in relation to each of the other amounts of eligible relevant expenditure, as the case may be, the condition specified in that paragraph would be satisfied in relation to that other amount or in relation to each of those other amounts, as the case may be; then, in the application of subsection (1B) in calculating the tax saving amount in relation to that person in relation to the year of income in relation to any one of the amounts of eligible relevant expenditure first referred to in this subsection, it shall be assumed that no tax benefit is or was allowable in respect of any part of the other of those amounts or in respect of any part of any of the other of those amounts, as the case may be. (1E) Where: (a) but for this subsection, subsection (1D) would apply to require it to be assumed, for the purposes of the application of subsection (1B) in relation to an amount of eligible relevant expenditure, that no tax benefit is or was allowable in respect of any part of another amount of eligible relevant expenditure (in this subsection referred to as the allowable relevant expenditure); and (b) section 82KL does not and will not operate to deem a tax benefit not to be allowable and never to have been allowable in respect of any part of the allowable relevant expenditure; subsection (1D) shall not apply and shall be taken never to have applied so as to require it to be assumed, in the application of subsection (1B) in relation to an amount of eligible relevant expenditure other than the allowable relevant expenditure, that no tax benefit is or was allowable in respect of any part of the allowable relevant expenditure. (1F) For the purposes of this Subdivision, an amount of relevant expenditure incurred by a taxpayer shall be taken to be an amount of eligible relevant expenditure if: (a) that amount of relevant expenditure was incurred after 24 September 1978 by reason of, as a result of or as part of a tax avoidance agreement entered into after that date; (b) by reason of, as a result of or as part of the tax avoidance agreement the taxpayer has obtained, in relation to that relevant expenditure being incurred, a benefit or benefits in addition to: (i) in a case to which subparagraph (ii) does not apply: (A) the benefit in respect of which the relevant expenditure was incurred; and (B) any benefit that resulted directly or indirectly from the benefit in respect of which the relevant expenditure was incurred and is a benefit that, in the opinion of the Commissioner, might reasonably be expected to have resulted if the benefit in respect of which the relevant expenditure was incurred had been obtained otherwise than by reason of, as a result of or as part of a tax avoidance agreement; or (ii) in a case where the relevant expenditure is relevant expenditure to which paragraph (w) of the definition of relevant expenditure in subsection (1) applies-any benefit that resulted directly or indirectly from the incurring of the relevant expenditure and is a benefit that, in the opinion of the Commissioner, might reasonably be expected to have resulted if the relevant expenditure had been incurred otherwise than by reason of, as a result of or as part of a tax avoidance agreement; and (c) in a case where the relevant expenditure is relevant expenditure to which paragraph (s), (v) or (w) of the definition of relevant expenditure in subsection (1) applies- that amount of relevant expenditure was incurred by reason of, as a result of or as part of a tax avoidance agreement entered into before 28 May 1981. (1FA) For the purposes of the application of subsection (1F) in relation to an amount of relevant expenditure to which paragraph (f) of the definition of relevant expenditure in subsection (1) applies, any benefit obtained by the taxpayer in relation to the making of the loan in respect of which the bad debt is incurred shall be taken to be a benefit obtained by the taxpayer in relation to that relevant expenditure being incurred. (1G) The reference in subsection (1F) to the benefit in respect of which relevant expenditure was incurred by a taxpayer shall be read as a reference to: (a) in a case where the relevant expenditure is expenditure incurred by the taxpayer in borrowing money, being expenditure in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 25-25 (Borrowing expenses) of the Income Tax Assessment Act 1997-the making available to the taxpayer of the money borrowed by the taxpayer; (b) in a case where the relevant expenditure is expenditure incurred by the taxpayer in connection with the discharge of a mortgage, being expenditure in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 25-30 (Expenses of discharging a mortgage) of the Income Tax Assessment Act 1997-the discharge of the mortgage; (c) in a case where the relevant expenditure was incurred by the taxpayer in the purchase of property that, for the purposes of the application of this Act in relation to the taxpayer, is or was trading stock-the acquisition of that property by the taxpayer; (d) in a case where the relevant expenditure was incurred by the taxpayer in respect of interest-the availability to the taxpayer of the money borrowed by the taxpayer; (e) in a case where the relevant expenditure was incurred by the taxpayer in respect of rent-the use of the property in respect of which the rent was paid; (f) in a case where the relevant expenditure incurred by the taxpayer was in respect of a bad debt-any interest received or receivable by the taxpayer in respect of the loan in respect of which the bad debt was incurred; (g) in a case where the relevant expenditure was incurred by the taxpayer in respect of the production, marketing or distribution of a film or the acquisition of a copyright subsisting in a film and is relevant expenditure to which paragraph (g) of the definition of relevant expenditure in subsection (1) applies-the production, marketing or distribution of the film, or the acquisition of the copyright by the taxpayer, as the case may be; (h) in a case where the relevant expenditure was incurred by the taxpayer in respect of a unit of industrial property, being a unit of industrial property that relates to copyright subsisting in a film, and is relevant expenditure to which paragraph (h) of the definition of relevant expenditure in subsection (1) applies-the ownership by the taxpayer of the unit of industrial property; (k) in a case where the relevant expenditure was incurred by the taxpayer in the purchase of consumable supplies-the acquisition of those consumable supplies by the taxpayer; (m) in a case where the relevant expenditure was incurred by the taxpayer in respect of market research-the undertaking of the research, or the provision of the information, advice or assistance, in respect of which the relevant expenditure was incurred; (n) in a case where the relevant expenditure was incurred by the taxpayer in respect of the acquisition of a unit of industrial property, being a licence under a copyright subsisting in computer software-the acquisition by the taxpayer of the unit of industrial property; (o) in a case where the relevant expenditure was incurred by the taxpayer by way of commission for collecting assessable income of the taxpayer-the collection on behalf of the taxpayer of assessable income of the taxpayer; (p) in a case where the relevant expenditure was incurred by the taxpayer in respect of the growing, care or supervision of trees on behalf of the taxpayer-the growing, care or supervision of the trees on behalf of the taxpayer; (pa) in a case where the relevant expenditure was incurred by the taxpayer in respect of the establishment and tending of trees for felling on behalf of the taxpayer-the establishment and tending of trees for felling on behalf of the taxpayer; (q) in a case where the relevant expenditure was incurred by the taxpayer for the purpose of increasing the value of shares in a company, being shares held or beneficially owned by the taxpayer as trading stock-the increase in the value of those shares; (r) in a case where the relevant expenditure was incurred by the taxpayer in respect of the production of, or the procuration of the production of, a master sound recording-any amount payable to the taxpayer in respect of the master sound recording, being an amount that, in the opinion of the Commissioner, would be payable to the taxpayer as a result of the incurring by the taxpayer of the relevant expenditure if that expenditure had been incurred by reason of, as a result of or as part of an agreement other than a tax avoidance agreement; (s) in a case where the relevant expenditure consists of calls paid by the taxpayer on shares owned by the taxpayer and is relevant expenditure to which paragraph (s) of the definition of relevant expenditure in subsection (1) applies-the satisfaction of any liability of the taxpayer to pay the calls and the taxpayer's continuing ownership of the shares; and (u) in a case where the relevant expenditure was incurred by the taxpayer in respect of a unit of industrial property and is relevant expenditure to which paragraph (v) of the definition of relevant expenditure in subsection (1) applies-the ownership by the taxpayer of the unit of industrial property. (1H) For the purposes of paragraph (1F)(b), but without limiting the generality of that paragraph, where: (a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement; (b) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, the taxpayer or an associate of the taxpayer acquires from another person the right to recover the amount of a debt that was owed to that other person; and (c) by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, no consideration was paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of that right or the amount or value of the consideration paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of that right was less than the amount of the debt; the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit having a value equal to: (d) in a case where no consideration was paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of the right to recover the amount of the debt-the amount of the debt; and (e) in any other case-the amount by which the amount of the debt exceeds the amount or value of the consideration paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of the right to recover the amount of the debt. (1J) For the purposes of paragraph (1F)(b), but without limiting the generality of that paragraph, where: (a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement; (b) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement: (i) a debt becomes owing by the taxpayer or an associate of the taxpayer; or (ii) a debt became owing, before or at the time of the incurring of the relevant expenditure, by the taxpayer or an associate of the taxpayer; and (c) it may reasonably be expected that, by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, the person to whom the debt is owed will release, abandon or fail to demand repayment of the debt or of a part of the debt; the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit of an amount equal to the amount of the debt or that part of the debt, as the case may be. (1JA) For the purposes of the application of subsection (1H) in relation to an amount of relevant expenditure incurred by a taxpayer, being relevant expenditure to which paragraph (f) of the definition of relevant expenditure in subsection (1) applies, a reference in paragraph (1H)(b) to the acquisition by the taxpayer or an associate of the taxpayer, in relation to that relevant expenditure being incurred, of the right to recover a debt shall be read as including a reference to the acquisition by the taxpayer or an associate of the taxpayer, in relation to the making by the taxpayer of the loan in respect of which the relevant expenditure was incurred, of such a right. (1JB) For the purposes of the application of subsection (1J) in relation to an amount of relevant expenditure incurred by a taxpayer, being relevant expenditure to which paragraph (f) of the definition of relevant expenditure in subsection (1) applies, a reference in paragraph (1J)(b) to a debt becoming owing, or having become owing, by the taxpayer or an associate of the taxpayer in relation to that relevant expenditure being incurred, shall be read as including a reference to a debt becoming owing, or having become owing, by the taxpayer or an associate of the taxpayer, in relation to the making by the taxpayer of the loan in respect of which the relevant expenditure was incurred. (1JE) For the purposes of paragraph (1F)(b), but without limiting the generality of that paragraph, where: (a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement; (b) that relevant expenditure consists of calls paid by the taxpayer on shares owned by the taxpayer and is relevant expenditure to which paragraph (s) of the definition of relevant expenditure in subsection (1) applies; and (c) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, consideration (in this subsection referred to as the relevant consideration) is paid or given to the taxpayer or an associate of the taxpayer in respect of the acquisition by any person from the taxpayer of: (i) all or any of those shares; (ii) the right to purchase all or any of those shares; or (iii) the right to require a person to vote, in a meeting of shareholders of the company, in favour of a resolution to vary the rights attached to all or any of those shares; the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit in addition to the benefits referred to in subparagraphs (1F)(b)(i) and (ii) having a value equal to the amount or value of the relevant consideration reduced by the amount or value of the part (if any) of that relevant consideration that, in the opinion of the Commissioner, is attributable to expenditure (other than the relevant expenditure) incurred by the taxpayer in respect of the shares. (1K) Where: (a) 2 or more amounts of relevant expenditure are incurred by a taxpayer (whether in the same year of income or in different years of income) by reason of, as a result of or as part of the same tax avoidance agreement; (b) the same paragraph of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts; and (c) those amounts were incurred in respect of the same benefit; those amounts shall, for the purposes of this Subdivision, be treated as together constituting one amount of relevant expenditure. (1L) For the purposes of subsection (1K), 2 or more amounts of relevant expenditure shall be taken to have been incurred in respect of the same benefit if: (a) in a case where paragraph (a) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same loan; (b) in a case where paragraph (b) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the discharge of the same mortgage; (c) in a case where paragraph (c) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in the purchase of the same property; (d) in a case where paragraph (d) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same loan; (e) in a case where paragraph (e) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same property; (f) in a case where paragraph (f) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same loan; (g) in a case where paragraph (g) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same film; (h) in a case where paragraph (h) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same film; (k) in a case where paragraph (k) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in the purchase of the same property; (m) in a case where paragraph (m) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same market research; (n) in a case where paragraph (n) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same unit of industrial property; (o) in a case where paragraph (o) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same source of assessable income; (p) in a case where paragraph (p) or paragraph (pa) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of trees on the same parcel of land; (q) in a case where paragraph (q) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same shares; (r) in a case where paragraph (r) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were payable to the same person; (s) in a case where paragraph (s) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were calls paid on shares in the same company; (v) in a case where paragraph (v) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same unit of industrial property; and (w) in a case where paragraph (w) of the definition of relevant expenditure in subsection (1) applies in relation to each of those amounts-those amounts were incurred in respect of the same source of assessable income or in carrying on the same business. (1M) For the purposes of this Subdivision, a person who obtains a benefit by reason of an act, transaction or circumstance that occurs as part of, in connection with or as a result of a tax avoidance agreement shall be deemed to have obtained that benefit by reason of the tax avoidance agreement. (1N) Where, for the purposes of the application of any provision of this Subdivision, it is required to be assumed that a tax benefit is not or was not allowable in respect of any part of an amount of eligible relevant expenditure and that expenditure is expenditure that was incurred in the acquisition of property that, for the purposes of the application of this Act in relation to the person who incurred the expenditure, is or was trading stock, it shall also be assumed, for the purposes of the application of that provision, that, for the purposes of the application of Division 70 (Trading stock) or 385 (Primary production) of the Income Tax Assessment Act 1997 in relation to that property in relation to the person who incurred the expenditure, that the cost of that property is, and at all times was, nil. (1P) For the purposes of this Subdivision, any benefit that has been obtained by an associate of a taxpayer by reason of, as a result of or as part of a tax avoidance agreement, being a benefit that was obtained in relation to the incurring by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of relevant expenditure, not being relevant expenditure to which subsection (1Q) applies, shall be taken to be a benefit that was obtained by the taxpayer by reason of that tax avoidance agreement and in relation to that relevant expenditure being incurred by the taxpayer. (1Q) For the purposes of this Subdivision, any benefit that has been obtained by an associate of a taxpayer by reason of, as a result of or as part of a tax avoidance agreement, being a benefit that was obtained in relation to: (a) the incurring by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of relevant expenditure to which paragraph (f) of the definition of relevant expenditure in subsection (1) applies; or (b) the making by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of the loan in respect of which relevant expenditure to which that paragraph applies was incurred; shall be taken to be a benefit that was obtained by the taxpayer by reason of that tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer or that loan being made by the taxpayer, as the case may be. (1S) For the purposes of the application of this section in determining the amount of any additional benefit obtained by a taxpayer in relation to an amount of relevant expenditure to which paragraph (h) of the definition of relevant expenditure in subsection (1) applies being incurred, being expenditure that, by virtue of the expenditure of moneys (in this subsection referred to as the partnership moneys) by a partnership, is deemed by section 124KA to have been incurred by the taxpayer: (a) the partnership shall be taken to be an associate of the taxpayer; (b) a reference to the relevant expenditure being incurred by the taxpayer shall be read as including a reference to the partnership moneys being expended by the partnership; and (c) any benefit obtained by the partnership in relation to the partnership moneys being expended by the partnership shall be taken to have been obtained by the taxpayer in relation to the relevant expenditure being incurred by the taxpayer to such extent only as the Commissioner considers fair and reasonable. (1T) Where: (a) a taxpayer expends moneys (in this subsection referred to as the film moneys) in producing, or by way of contribution to the cost of producing, a film; and (b) by virtue of the operation of subsection 124K(2), a part only of the film moneys is taken to be an amount of relevant expenditure to which paragraph (h) of the definition of relevant expenditure in subsection (1) applies; for the purposes of the application of this section in determining the amount of any additional benefit obtained by the taxpayer in relation to the relevant expenditure being incurred: (c) a reference to the relevant expenditure being incurred by the taxpayer shall read as including a reference to the film moneys being expended by the taxpayer; and (d) any benefit obtained by the taxpayer in relation to the film moneys being expended by the taxpayer shall be taken to have been obtained by the taxpayer in relation to the relevant expenditure being incurred by the taxpayer to such extent only as the Commissioner considers fair and reasonable. (2) A reference in this Subdivision to the supply of goods or the provision of services shall be read as not including a reference to the making available of money by way of loan. (3) For the purposes of this Subdivision, an agreement shall be taken to have been entered into or carried out for a particular purpose, or for purposes that included a particular purpose, if any of the parties to the agreement entered into or carried out the agreement for that purpose, or for the purposes that included that purpose, as the case may be. (4) A reference in this Subdivision to a person shall be read as including a reference to a person in the capacity of a trustee. (5) A reference in this Subdivision to a provision of the Income Tax Assessment Act 1997 includes a reference to the corresponding provision of the Income Tax Assessment Act 1936. 82KJ Deduction not allowable in respect of certain pre-paid outgoings Where: (a) a loss or outgoing in respect of which a deduction would, but for this Subdivision, be allowable, was incurred by a taxpayer after 19 April 1978 by reason of, as a result of or as part of a tax avoidance agreement; (b) having regard to the benefit in respect of which the loss or outgoing was incurred (but without regard to any benefit relating to the acquisition or possible acquisition of the property referred to in paragraph (c)), the amount of the loss or outgoing was greater than the amount (if any) that might reasonably be expected to have been incurred, at the time when the loss or outgoing was incurred, in respect of that benefit if the loss or outgoing had not been incurred by reason of, as a result of or as part of a tax avoidance agreement; (c) property has been, will be, or may reasonably be expected to be, acquired by the taxpayer or by an associate of the taxpayer as a result of, by reason of, or as part of the tax avoidance agreement; and (d) the consideration (if any) that was payable in respect of the acquisition of that property was less, or the consideration that may reasonably be expected to be payable in respect of the acquisition of that property is less, than the consideration that might reasonably be expected to have been payable, or to be payable, as the case may be, in respect of the acquisition of that property if the loss or outgoing had not been incurred; notwithstanding any other provision of this Act, a deduction is not allowable to the taxpayer in respect of the loss or outgoing. 82KK Schemes designed to postpone tax liability (1) This section applies to a loss or outgoing incurred by a taxpayer if: (a) the loss or outgoing was incurred after 19 April 1978 and was incurred to an associate of the taxpayer; (b) a deduction is allowable to the taxpayer in respect of that loss or outgoing; and (c) the deduction allowable in respect of that loss or outgoing would, but for this section, be allowable to the taxpayer in the year of income in which the loss or outgoing was incurred and: (i) in a case where the loss or outgoing is in respect of interest that, if it had actually been paid, would be subject to withholding tax under Division 11A-the withholding tax payable in respect of the whole or a part of the interest is not payable until a time occurring in a subsequent year of income; and (ii) in any other case-the whole or a part of the amount incurred to the associate will not be included in the assessable income of the associate until a subsequent year of income. (2) Notwithstanding any other provision of this Act, where: (a) a taxpayer incurs in a year of income (in this subsection referred to as the relevant year of income) a loss or outgoing (not being a loss or outgoing in respect of the supply of goods or the provision of services at a time that occurs after, or during a period that occurs after or extends beyond, the end of the relevant year of income) and the loss or outgoing is a loss or outgoing to which this section applies; and (b) the loss or outgoing was incurred by reason of, as a result of, as part of or in connection with an agreement, course of conduct or course of business that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that: (i) in a case where the loss or outgoing is in respect of interest that, if it had actually been paid, would be subject to withholding tax under Division 11A-the withholding tax payable in respect of the whole or a part of the interest will not be payable until a time occurring in a subsequent year of income; and (ii) in any other case-the whole or a part of the amount incurred to the associate would not be included in the assessable income of the associate until a subsequent year of income; the loss or outgoing shall, for the purposes of this Act, be deemed to have been incurred by the taxpayer in the relevant year of income and in any subsequent year of income only to the extent to which the loss or outgoing represents an amount actually paid during the relevant year of income or that subsequent year of income by the taxpayer to the person to whom the loss or outgoing is incurred. (3) Notwithstanding any other provision of this Act but subject to subsection (4), where: (a) a taxpayer incurs in a year of income a loss or outgoing in respect of the supply of goods or the provision of services at a time that occurs after, or during a period that occurs after or extends beyond, the end of the year of income and the loss or outgoing is a loss or outgoing to which this section applies; and (b) the loss or outgoing was incurred by reason of, as a result of or as part of an agreement that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that: (i) a deduction would be allowable to the taxpayer in a year of income in respect of the loss or outgoing; and (ii) the whole or a part of the amount of the loss or outgoing would not be included in the assessable income of the person to whom the loss or outgoing was incurred until a subsequent year of income; that loss or outgoing shall, for the purposes of this Act, be deemed to have been incurred by the taxpayer in the year of income in which, or in the years of income in which, goods to which the loss or outgoing relates are supplied or services to which the loss or outgoing relates are provided. (4) Where, by virtue of subsection (3), a loss or outgoing incurred by a taxpayer in respect of the supply of goods or the provision of services is deemed to have been incurred by the taxpayer in each of 2 or more years of income, there shall be allowable as a deduction to the taxpayer in each such year of income so much only of the amount that, apart from this section, would be allowable as a deduction in respect of the loss or outgoing as the Commissioner considers reasonable having regard to the extent to which the goods in respect of which the loss or outgoing was incurred were supplied or the services in respect of which the loss or outgoing was incurred were provided, in each of those years of income. (5) In determining whether paragraph (2)(b) or (3)(b) applies in relation to a loss or outgoing, no regard shall be had to a purpose that is a merely incidental purpose. 82KL Tax benefit not allowable in respect of certain recouped expenditure (1) Where the sum of the amount or value of the additional benefit in relation to an amount of eligible relevant expenditure incurred by a taxpayer and the expected tax saving in relation to that amount of eligible relevant expenditure is equal to or greater than the amount of the eligible relevant expenditure, notwithstanding any other provision of this Act but subject to this section, a tax benefit is not and shall be deemed never to have been, allowable in respect of any part of that amount of eligible relevant expenditure. (2) Where, at any time, the Commissioner is of the opinion that, apart from this subsection, subsection (1) might reasonably be expected, at a later time, to operate to deem a tax benefit not to be allowable and never to have been allowable in respect of expenditure or a loss or outgoing incurred by a taxpayer then, notwithstanding any other provision of this Act but subject to this section, a tax benefit is not allowable and shall be deemed never to have been allowable in respect of that expenditure or that loss or outgoing, as the case may be. (3) Where, in the making of an assessment, subsection (2) has been applied by reason that the Commissioner was of the opinion that a particular circumstance would exist and the Commissioner later becomes satisfied that that circumstance will not exist, then, notwithstanding anything contained in section 170, the Commissioner may amend the assessment at any time for the purposes of ensuring that this Subdivision shall be taken always to have applied on the basis that that circumstance did not, and would not, exist. (4) Where: (a) an amount of eligible relevant expenditure is incurred by a partnership; (b) apart from this subsection, this section would not operate to deem a tax benefit not to be allowable and never to have been allowable in respect of any part of that amount of eligible relevant expenditure; and (c) the Commissioner is satisfied that any partner in the partnership became a partner in the partnership by reason of or as a result of an agreement (whether or not that agreement was the agreement by virtue of which the partner became a partner in the partnership) that was entered into by any of the parties to the agreement for the purpose, or primarily for the purpose, of ensuring that this section would not operate to deem a tax benefit not to be allowable and never to have been allowable in respect of any part of the amount of the eligible relevant expenditure; then, notwithstanding any other provision of this Act, a tax benefit is not allowable and shall be deemed never to have been allowable in respect of any part of that amount of eligible relevant expenditure. (5) Where: (a) in the making of an assessment, this section has been applied on the basis that a taxpayer was to be taken to have obtained a benefit by reason that it was reasonable to expect that a person to whom a debt was owed by the taxpayer or an associate of the taxpayer would release, abandon or fail to demand repayment of the debt or of a part of the debt; and (b) the whole or a part of that debt or of that part of the debt is repaid; then, notwithstanding anything contained in section 170, the Commissioner may amend the assessment at any time for the purposes of ensuring that this Subdivision shall be taken never to have applied on the basis that it was reasonable to expect that the person to whom the debt was owed would release, abandon or fail to demand repayment of the amount that was repaid. (6) Where subsection (1), (2) or (4) deems a tax benefit not to be and never to have been allowable in respect of a loss or outgoing incurred by a taxpayer in the purchase of property that, for the purposes of the application of this Act and the Income Tax Assessment Act 1997 in relation to the taxpayer is or was trading stock, then, notwithstanding any other provision of this Act or that Act, the cost or cost price of that property, for the purposes of the application of (Primary production) of the Income Tax Assessment Act 1997 Subdivision B of Division 2 of Part III of this Act or Division 70 (Trading stock) or 385 in relation to that property in relation to the taxpayer, shall be taken to be, and at all times to have been, nil. (7) Where, at any time after the making of an assessment in relation to a taxpayer, the taxpayer considers that the Commissioner ought to amend the assessment in accordance with subsection (3) or (5), the taxpayer may post to or lodge with the Commissioner a request in writing for an amendment of the assessment in accordance with subsection (3) or (5) or in accordance with subsections (3) and (5). (8) The Commissioner shall consider the request and shall serve on the taxpayer, by post or otherwise, a written notice of his decision on the request. (9) If the taxpayer is dissatisfied with the Commissioner's decision on the request, the taxpayer may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953. Subdivision H-Period of deductibility of certain advance expenditure 82KZL Interpretation (1) In this Subdivision, unless the contrary intention appears: agreement means any agreement, arrangement, understanding or scheme, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings. approved stock exchange has the meaning give by section 470. associate has the meaning given by section 318. eligible service period, in relation to an amount of expenditure incurred under an agreement, means the period from the beginning of: (a) the day, or the first day, on which the thing to be done under the agreement in return for the amount of expenditure is