Debt and equity: what is "the interest" when funding through connected entities? - TD 2014/D19
13 Nov 2014
On 12 November 2014, the ATO released for public comment by 12 December 2014 draft Taxation Determination TD 2014/D18 entitled "Income tax: is the reference to 'the interest' as it appears in the phrase at the end of subsection 974-80(2) of the Income Tax Assessment Act 1997 a reference to the interest held by the 'ultimate recipient'?"
The answer given to the question posed is as follows:
"Yes. 'The interest' referred to in the phrase at the end of subsection 974-80(2)1 is the interest held by the 'ultimate recipient' and not the interest held by the 'connected entity'."