22Deductions for bad debts

22 Deductions for bad debts

General (1) In relation to a transfer of a debt, these rules about deductions for bad debts have effect as shown in the table: (a) section 25‑35 of the Income Tax Assessment Act 1997; (b) subsection 63(1A) of the Income Tax Assessment Act 1936.

<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><tbody><tr><td colspan="3" style="width:343.6pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Effect of rules about deductions for bad debts</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">Case</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">If:</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">then those rules have effect as if:</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the debt was included in the transferring corporation’s assessable income of a year of income</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the debt had been included in the receiving corporation’s assessable income of that year of income</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the debt is in respect of money lent by the transferring corporation in the ordinary course of its business of lending money</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the debt were in respect of money lent by the receiving corporation in the ordinary course of a business of lending money</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the transferring corporation bought the debt in the ordinary course of its business of lending money</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the receiving corporation had bought the debt in the ordinary course of a business of lending money</span></p></td></tr></tbody></table>