Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 240 - Arrangements treated as a sale and loan  

Subdivision 240-F - The end of the arrangement  

Operative provisions

SECTION 240-80   What happens if the arrangement is extended or renewed  

240-80(1)    
This section sets out what happens if, after the end of the *arrangement, the *notional buyer and *notional seller extend or renew the *arrangement.

240-80(2)    
This Division applies as if the original *arrangement has ended and the extended arrangement or renewed arrangement is a separate arrangement (the new arrangement ).

240-80(3)    
There is not, however, taken to be any disposal or acquisition as a result of the original arrangement ending or of the new arrangement starting and the *notional buyer does not cease to own the property.

240-80(4)    

Also, the notional loan principal for the new loan is:

(a) if the *arrangement as extended or renewed states an amount as the cost or value of the property for the purposes of the extension or renewal and the *notional seller and the *notional buyer were dealing with each other at *arm's length in connection with the extension or renewal - the amount so stated; or

(b) otherwise - the amount that could reasonably have been expected to have been paid by the notional buyer for the purchase of the property if:

(i) the notional seller had actually sold the property to the notional buyer when the arrangement was extended or renewed; and

(ii) the notional seller and notional buyer were dealing with each other at arm's length in connection with the sale.

240-80(5)    

Subdivision 240-G applies to the notional loan for the original arrangement. For that purpose, the notional loan principal for the new arrangement is taken to be a *termination amount paid to the *notional seller under the original arrangement.