Income Tax Assessment Act 1997

CHAPTER 6 - THE DICTIONARY  

PART 6-1 - CONCEPTS AND TOPICS  

Division 974 - Debt and equity interests  

Subdivision 974-C - Equity interests in companies  

SECTION 974-85   Right or return contingent on aspects of economic performance  

974-85(1)  


A right, or the amount of a return, is contingent on aspects of the economic performance of an entity, or a part of the entity ' s activities, if the right or return is contingent on the economic performance of that entity, or that part of those activities, but not solely because of one of the following:


(a) the ability or willingness of an entity to meet the obligation to satisfy the right to the return;


(b) the receipts or turnover of the entity or the turnover generated by those activities.

974-85(2)  


The regulations may specify circumstances in which a right or return is to be taken to be contingent, or not contingent, on aspects of the economic performance of an entity or a part of an entity ' s activities.

974-85(3)  
The regulations may provide that paragraph (1)(b) does not apply in the circumstances specified in the regulations.

974-85(4)  
The regulations may provide that an interest that:


(a) is covered by item 2 in the table in subsection 974-75(1) or paragraph 974-80(2)(a) ; and


(b) arises in the circumstances specified in the regulations;

is not an equity interest because of:


(c) the limited extent to which the right or return that the interest carries is *contingent on aspects of the economic performance of an entity or a part of the entity ' s activities; or


(d) the practical insignificance of the right or return that the interest carries being contingent on that performance.


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