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Does forgiveness of a debt under section 245-35 of Schedule 2C to the Income Tax Assessment Act 1936 (ITAA 1936) include forgiving part of a commercial debt?

Yes, subsection 245-245(1) of Schedule 2C to the ITAA 1936 provides that for the purposes of applying Schedule 2C the term 'debt' includes part of a debt.

After 27 June 1996 Creditor released Debtor from its obligation to pay part of a debt.

The debt was a commercial debt for the purposes of section 245-25 of Schedule 2C to the ITAA 1936.

Section 245-10 of Schedule 2C to the ITAA 1936 provides that Schedule 2C applies where a forgiveness of a commercial debt occurs after 27 June 1996.

Pursuant to subsection 245-35(1) of Schedule 2C to the ITAA 1936 a debt is forgiven if the debtor's obligation to pay the debt is released.

Subsection 245-245(1) of Schedule 2C to the ITAA 1936 provides that for the purposes of applying Schedule 2C a debt includes part of a debt.