INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 250 - Assets put to tax preferred use  

Subdivision 250-B - When this Division applies to you and an asset  

Predominant economic interest

SECTION 250-135   Level of expected financial benefits test  

Effective guarantee or indemnity for value of asset

250-135(1)  
You lack a predominant economic interest in an asset at a particular time if the asset has a *guaranteed residual value at that time. Likely financial benefits exceeding 70% limit

250-135(2)  
You also lack a predominant economic interest in an asset at a particular time if, at that time:


(a) the *arrangement under which the asset is *put to the tax preferred use (either alone or together with any other arrangement in relation to the *tax preferred use of the asset or the *provision of *financial benefits in relation to the tax preferred use of the asset) is a *debt interest; or


(b) the sum of the present values of the *expected financial benefits that *members of the tax preferred sector have provided, or are reasonably likely to provide, to you (or a *connected entity) in relation to the tax preferred use of the asset exceeds 70% of:


(i) the *market value of the asset if subparagraph 250-15(d)(i) applies; or

(ii) so much of the market value of the asset as is attributable to the expenditure referred to subparagraph 250-15(d)(ii) if that subparagraph applies.

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