Section 385 — Income Tax Act 2007: General provisions about loans

General provisions about loans 385 1 References in this Chapter to a loan being used or used in any way—

a are references to the money lent being applied or, as the case may be, applied in that way, and b except in section 403 include references to a loan being used to meet expenditure already incurred or, as the case may be, already incurred on such a use.

2 Sections 392, 396, 398, 401 and 403 apply to a loan only if it is made—

a in connection with the use of money, and b on the occasion of its use or within what is in the circumstances a reasonable time from its use.

3 Those sections apply to a loan only if the loan is used as mentioned in those sections without first having been used for another purpose.

4 For the purposes of this Chapter the giving of credit for any money due from the purchaser under a sale is treated as the making of a loan used by the purchaser in making the purchase.