Commonwealth Numbered Acts

INCOME TAX LAWS AMENDMENT ACT 1980 No. 19 of 1980 - SECT 7

7. (1) Section 82KH of the Principal Act is amended-

   (a)  by omitting "or" (last occurring) from paragraph (d) of the definition
of "relevant expenditure" in sub-section (1);

(b) by adding at the end of the definition of "relevant expenditure" in
sub-section (1) the following word and paragraph:



"or (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 51 or 63 in respect of the bad debt;";

   (c)  by inserting after sub-section (1A) the following sub-sections:



"(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 owed to the taxpayer becoming a
bad debt.



"(1AB) A reference in sub-section (2) of section 82KL, and a reference in
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.";

   (d)  by inserting after sub-section (1F) the following sub-section:



"(1FA) For the purposes of the application of sub-section (1F) in relation to
an amount of relevant expenditure to which paragraph (f) of the definition of
'relevant expenditure' in sub- section (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.";

   (e)  by omitting "and" from paragraph (d) of sub-section (1G);

   (f)  by adding at the end of sub-section (1G) the following word and
        paragraph:



"; and (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)  by inserting after sub-section (1J) the following sub-sections:



"(1JA) For the purposes of the application of sub-section (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 sub-section (1) applies, a reference in paragraph (b) of sub-section (1H)
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 sub-section (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 sub-section (1) applies, a reference in paragraph (b) of sub-section (1J)
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.";

   (h)  by omitting "and" from paragraph (d) of sub-section (1L);

   (j)  by adding at the end of sub-section (1L) the following word and
        paragraph:



"; and (f) in a case where paragraph (f) of the definition of 'relevant
expenditure' in sub-section (1) applies in relation to each of those
amounts-those amounts were incurred in respect of the same loan."; and

   (k)  by omitting sub-section (1P) and substituting the following sub-
        section:



"(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-

   (a)  in a case to which paragraph (b) does not apply-the incurring by the
        taxpayer, by reason of, as a result of or as part of that tax
        avoidance agreement, of relevant expenditure; or

   (b)  in a case where the relevant expenditure is of the kind referred to in
        paragraph (f) of the definition of 'relevant expenditure' in
        sub-section (1)-the incurring by the taxpayer, by reason of, as a
        result of or as part of that tax avoidance agreement, of that
        relevant expenditure or 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 the bad debt 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 that relevant expenditure being
        incurred by the taxpayer, or that loan being made by the taxpayer, as
        the case may be.".

(2) The amendments made by sub-section (1) apply in relation to bad debts
incurred in respect of loans made after 24 September 1978.