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UVW Pty Ltd borrows $1 million and lends it interest-free to its wholly owned subsidiary. No dividends have ever been received although similar loans have

UVW Pty Ltd borrows $1 million and lends it interest-free to its wholly owned subsidiary.

No dividends have ever been received although similar loans have been made between

the companies for the last 10 years.

Is UVW entitled to a deduction for the interest on the loan?

You should support your answer by referring to the following Taxation Law Case: FCT v Total Holdings (Australia) Pty Ltd (1979).

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