INCOME TAX ASSESSMENT ACT 1997 - SECT 820.325 Amount of debt deduction disallowed

INCOME TAX ASSESSMENT ACT 1997 - SECT 820.325

    The amount of * debt deduction disallowed under subsection   820 - 300(1) is worked out using the following formula:

where:

"average debt" means the average value, for the income year, of all the * debt capital of the entity that gives rise to * debt deductions of the entity for that or any other income year (other than any debt capital that is attributable to any of the entity's * overseas permanent establishments).

"capital shortfall" means the amount by which the * adjusted average equity capital of the entity for that year (see subsection   820 - 300(3)) is less than the entity's * minimum capital amount for that year.

"debt deduction" means each * debt deduction covered by subsection   820 - 300(1).

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