INCOME TAX ASSESSMENT ACT 1997

CHAPTER 6 - THE DICTIONARY  

PART 6-1 - CONCEPTS AND TOPICS  

Division 974 - Debt and equity interests  

Subdivision 974-B - Debt interests  

SECTION 974-65   Commissioner's power  

974-65(1)  
Despite subsection 974-20(1) (the debt test), the Commissioner may determine that a *scheme gives rise to a debt interest in an entity if the Commissioner considers that:


(a) the scheme would satisfy paragraphs 974-20(1)(a) , (b), (c) and (e); but


(b) instead of satisfying paragraph 974-20(1)(d) , the scheme would satisfy all the following subparagraphs:


(i) it is substantially more likely than not that the value of the *financial benefit to be provided by the entity (or a *connected entity of the entity) under the *effectively non-contingent obligation will be at least equal to the substantial part of the value of the financial benefit received or to be received by the entity (or its connected entity) under the scheme;

(ii) it is substantially more likely than not that other financial benefits will be provided by the entity (or its connected entity) to one or more entities under the scheme;

(iii) it is substantially more likely than not that the sum of the values of the financial benefits mentioned in subparagraphs (i) and (ii) will be at least equal to the value of the financial benefit received by the entity (or its connected entity) under the scheme.

974-65(2)  
In making the determination, the Commissioner must have regard to the following:


(a) the difference between the value of the *financial benefit received and the value of the financial benefit to be provided under the *effectively non-contingent obligation;


(b) the degree of likelihood of other financial benefits being provided under the *scheme;


(c) the degree of likelihood of the sum of the value of the financial benefits mentioned in subparagraphs (1)(b)(i) and (ii) being equal to or greater than the value of the financial benefit received under the scheme;


(d) the particular circumstances surrounding the scheme (including circumstances of the parties to the scheme and their purposes for entering into the scheme).

974-65(3)  
If the Commissioner determines under this section that a *scheme gives rise to a *debt interest, the scheme has that effect for all purposes of this Division.


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