Page 112 - P6 Slide - Taxation - Lecture Day 1

Reduction or cancellation of debt – par12A

(on/after 1 Jan 2013)

• When debt owed by a person (debtor) is reduced and

• the amount of the debt reduction > any consideration

for the reduction (‘reduction amount’)

AND

• the debt was originally used to fund:

– a capital asset (other than an allowance asset)

– an allowance asset (acquisition, creation or improvement)