QB 20/02
Issued
24 Jun 2020
Published
25 Jun 2020

Income tax – Natural love and affection exception to debt remission income for look-through company

This Question We’ve Been Asked considers whether a look-through company (LTC) derives debt remission income when a close friend or family member of the LTC’s shareholders forgives a loan made to the LTC. It concludes that s EW 46C prevents the LTC from deriving debt remission income where all of the shareholders and the close friend or family member have natural love and affection for each other. It also concludes that the Commissioner will generally accept that the shareholders and the close friend or family member have natural love and affection for each other.

Tax Information Bulletin Vol 32 No 7 - August 2020

Income Tax Act 2007, ss EW 31, EW 46C, HB 1, YA 1 (“look-through interest”)

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Director of Public Prosecutions (Vic) v Le
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