The Government will ensure a more consistent tax treatment for bad debts between related parties irrespective of whether they are members of a tax consolidated group.
This will be achieved by denying a tax deduction for a bad debt written off where the debtor is a related party not in the same tax consolidated group. The corresponding gain to the debtor will also not be taxed.
Date of effect: This measure will apply from 7:30pm (AEST) on 8 May 2012.
Source: Budget Paper No 2 [p 18]
[WTB 19, 8/5]