DG 10Interest expenditure rules

1. Sections DG 11 to DG 14 provide for the apportionment of interest expenditure incurred by a company that has an asset to which this subpart applies, and by other companies that are in the same group of companies as the company, and by shareholders. Companies must provide information disclosure statements under section 30D of the Tax Administration Act 1994 to enable the calculations to be made.

2. Repealed

3. A company (company A) that is treated as part of a wholly-owned group under this subpart, but is not part of a wholly-owned group for the other purposes of this Act, is excluded from the interest expenditure rules in sections DG 11 to DG 14 for an income year if—

4. no private use of an asset of a company in the group has been made in the income year by a shareholder of company A:
5. no tax losses have been made available under subpart IC (Grouping tax losses) between company A and other companies in the group.

6. Section DG 13 does not apply to a corporate shareholder if—

7. the shareholder has a direct or indirect interest of less than 50% in the company that has the asset; and
8. the shareholder has not enjoyed any private use of the asset.

9. Section DG 14 does not apply to a shareholder if—

10. the shareholder has a direct or indirect interest of less than 50% in the company that has the asset; and
11. the shareholder has not enjoyed any private use of the asset.

12. The interest expenditure rules apply to a qualifying company in the following way:

13. the company is treated as if section DG 11(3) applied to it in order to calculate the amount of the company's net asset balance; and
14. sections DG 12 to DG 14 then apply to determine the amount of the deduction to which the company, another company, or a shareholder is entitled.

15. For the purposes of subsections (2), (3), and (4), a reference to a shareholder includes a person associated with the shareholder, unless the associated person is also a shareholder.