• Related rules

    The debt and equity test provisions include the concept of related schemes. If schemes are related and the combined effect of the two schemes results in a debt interest, the schemes may, depending on certain conditions, together give rise to a debt interest. Also, if schemes are related and the combined effect of the two schemes results in an equity interest, the schemes may, depending on certain conditions, together give rise to an equity interest.

    The following are examples of related schemes, even if they are detachable:

    • schemes that are commercially connected in that it is unlikely that one would be entered into without the other
    • schemes that depend for their effect or operation on the effect or operation of the other interests, and
    • schemes that complement or supplement the effect or operation of each other.
      Last modified: 26 Mar 2015QC 36047