The Government will clarify that limited recourse debt includes arrangements where the creditor’s right to recover the debt is effectively limited to the financed asset or security provided.
This measure will ensure that tax deductions are not available for capital expenditure on assets that have been financed by limited recourse debt, to the extent that the taxpayer is not effectively at risk for the expenditure and does not make an economic loss.
Date of effect: This measure will apply from 7.30pm (AEST) on 8 May 2012.
Source: Budget Paper No 2 [p 31]
[WTB 19, 8/5]