Interest on full recourse loan used to prepay capital protected borrowing interest - TD 2013/1
24 Jan 2013
On 23 January 2013, the ATO issued Taxation Determination TD 2013/1 entitled "Income tax: will interest on a full recourse loan be denied deductibility as a consequence of Division 247 of ITAA 1997 where that loan is used to prepay interest on another loan which is a capital protected borrowing?"
It was previously issued in draft form as TD 2012/D10.
The answer given in the Taxation Determination is No.