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-E - Taxation of deemed loan  

Other provisions

SECTION 250-280   Financial arrangement received or provided as consideration  

250-280(1)  
If:


(a) this Subdivision applies in relation to your gains and losses from the *financial arrangement; and


(b) you start to have the financial arrangement (or a part of the financial arrangement) as consideration (or as part of the consideration) for:


(i) something (the thing provided ) that you provided, or are to provide, to someone else; or

(ii) something (the thing acquired ) that someone else has provided, or is to provide, to you; and


(c) the thing provided or the thing acquired is not money;

the amount of the benefit (or that part of the benefit) that you obtained for the thing provided, or gave for the thing acquired, is taken, for the purposes of applying this Act to you, to be the *market value of the financial arrangement (or that part of the financial arrangement) at the time when you start to have the financial arrangement.

Note 1:

This amount may be relevant, for example, for the purposes of applying the provisions of this Act dealing with capital gains, capital allowances or trading stock to the thing provided or the thing acquired.

Note 2:

The market value is to be used instead of the nominal value of the financial benefits to be provided under the financial arrangement.

250-280(2)  
If subsection (1) applies, you are taken to have received, or provided, as consideration for starting to have the *financial arrangement (or the part of the financial arrangement), *financial benefits whose value is equal to the market value of the financial arrangement (or that part of the financial arrangement) at the time when you started to have the financial arrangement.

250-280(3)  
If, but for this subsection:


(a) subsection (2) would apply to your starting to have a *financial arrangement; and


(b) subsection (1) or (4) would also apply to your starting to have the financial arrangement;

subsection (2) applies to your starting to have the financial arrangement and subsection (1) or (4) does not.

250-280(4)  
If:


(a) this Subdivision applies in relation to your gains and losses from the *financial arrangement; and


(b) you cease to have the financial arrangement (or a part of the financial arrangement) as consideration (or as part of the consideration) for:


(i) something (the thing acquired ) that someone else provides, or is to provide, to you; or

(ii) something (the thing provided ) that you provided, or are to provide, to someone else; and


(c) the thing acquired or the thing provided is not money;

the amount of the benefit (or that part of the benefit) that you provided for the thing acquired, or obtained for the thing provided, is taken, for the purposes of applying this Act to you, to be the *market value of the financial arrangement (or that part of the financial arrangement) at the time when you cease to have the financial arrangement (or that part of the financial arrangement).

Note 1:

This amount may be relevant, for example, for the purposes of applying the provisions of this Act dealing with capital gains, capital allowances or trading stock to the thing acquired or the thing provided.

Note 2:

The market value is to be used instead of the nominal value of the financial benefits to be provided under the financial arrangement.

250-280(5)  
If subsection (4) applies, you are taken to have provided, or received, as consideration for ceasing to have the *financial arrangement (or the part of the financial arrangement), *financial benefits whose value is equal to the market value of the financial arrangement (or that part of the financial arrangement) at the time when you ceased to have the financial arrangement.

250-280(6)  
If, but for this subsection:


(a) subsection (5) would apply to your ceasing to have a *financial arrangement; and


(b) subsection (1) or (4) would also apply to your ceasing to have the financial arrangement;

subsection (5) applies to your ceasing to have the financial arrangement and subsection (1) or (4) does not.

250-280(7)  
Without limiting subsections (1) and (4), the thing provided, or the thing acquired, need not be a tangible thing and may take the form of services, conferring a right, incurring an obligation or extinguishing or varying a right or obligation.


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