This Draft TD, issued Wed 31.10.2012, says where a taxpayer enters into a limited recourse loan (investment loan) which is made under a capital protected borrowing for the purposes of Div 247 of the ITAA 1997 and a full recourse loan (interest loan) is entered into solely to fund an amount of prepaid interest on the investment loan, the interest incurred on the interest loan will not be denied deductibility as a consequence of Div 247.

DATE OF EFFECT: When the final Determination is issued, it is proposed to apply both before and after its date of issue.

COMMENTS are due by 30 November 2012. ATO contact: Catherine Willis – Tel: (03) 9946 9388; Fax: (03) 9285 1943; Email: Catherine.Willis2@ato.gov.au.

[LTN 211, 31/10]