INCOME TAX ASSESSMENT ACT 1997 - SECT 820.220 Amount of debt deduction disallowed
INCOME TAX ASSESSMENT ACT 1997 - SECT 820.220
Amount of debt deduction disallowedThe amount of * debt deduction disallowed under subsection 820 - 185(1) is worked out using the following formula:
where:
"average debt" means the sum of:
(a) the average value, for the income year, of the entity's * debt capital that is covered by step 1 of the method statement in subsection 820 - 185(3); and
(b) the average value, for that year, of the entity's * cost - free debt capital that is covered by step 4 of that method statement.
"debt deduction" means each * debt deduction of the entity for that year.
"excess debt" means the amount by which the * adjusted average debt (see subsection 820 - 185(3)) exceeds the entity's * maximum allowable debt for that year.
Note: The disallowed amount also does not form part of the cost base of
a CGT asset. See section 110 - 54.