63Bad debts

63  Bad debts   Where a debt in respect of the whole or a part of a payment that has, or will, become liable to be made under a qualifying security within the meaning of Division 16E is written off as a bad debt by a taxpayer during a year of income, then, for the purposes of paragraph 25‑35(1)(a) of the Income Tax Assessment Act 1997, there is taken to have been included in the taxpayer’s assessable income of a year of income so much of the debt as equals the amount (if any) ascertained in accordance with the formula A – B, where: A  is the amount (if any) or the sum of the amounts (if any) included in the assessable income of the taxpayer of any year or years of income under section 159GQ that is or are attributable to the payment or to the part of the payment, as the case requires; and B  is the amount (if any) or the sum of the amounts (if any) allowable as a deduction or deductions from the assessable income of the taxpayer of any year or years of income under section 159GQ that is or are attributable to the payment or to the part of the payment, as the case requires. 63D  Bad debts etc. of money‑lenders not allowable deductions where attributable to listed country or unlisted country branches  (1) Subject to section 63F, if:  (a) apart from this section and section 63F, a deduction would be allowable to a taxpayer:  (i) under section 8‑1 or 25‑35 of the Income Tax Assessment Act 1997 in respect of the writing off of a debt as bad; or  (ii) under section 63E of this Act in respect of a debt/equity swap in relation to a debt; and  (b) the debt was created or acquired in the ordinary course of a money‑lending business of the taxpayer who carries on that business; and  (c) during any part or parts (the foreign country branch period) of the period since the debt was so created or acquired (the debt holding period), it is the case that, if income had been derived by the taxpayer in respect of the debt, the income would not, because of section 23AH of this Act, have been included in the assessable income of the taxpayer; then only a proportion of the deduction is allowable, being the proportion calculated using the formula:  debt holding period means the number of days in the debt holding period. eligible debt term means:  (a) where the debt was acquired from a person other than an associate, within the meaning of section 318 of this Act—the number of days in the debt holding period; or  (b) in any other case—the number of days in the period beginning on the day on which the debt was created (whether by the taxpayer or another person) and ending at the end of the day on which it was written off. foreign country branch period means the number of days in the foreign country branch period.  (2) Where a debt that is written off, or in respect of which there is a debt/equity swap (within the meaning of section 63E), was acquired from another person, the creation, and any previous acquisition, of the debt is to be disregarded for the purposes of applying subsection (1), other than paragraph (b) of the definition of eligible debt term in subsection (1).  (3) Where a part of a debt is written off as bad, this section applies as if the part were an entire debt that is written off as bad.