Commercial debt forgiveness - forgiveness of debt effected under a will

Where a debtor is forgiven a commercial debt under a will does Schedule 2C to the Income Tax Assessment Act 1936 (ITAA 1936) apply?

No. Where a debtor is forgiven a commercial debt under a will paragraph 245-40(b) of Schedule 2C to the ITAA 1936 operates to disregard the forgiveness.

After 27 June 1996 a debtor is forgiven a debt under a will.

The debt is 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.

Paragraph 245-40(b) of Schedule 2C to the ITAA 1936 provides that Schedule 2C does not apply where the debt is forgiven under a will.