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  

Balancing adjustment

SECTION 250-265   When balancing adjustment made  

When balancing adjustment made

250-265(1)  
A balancing adjustment is made under section 250-275 if:


(a) you transfer to another person all of your rights and/or obligations under the *financial arrangement; or


(b) all of your rights and/or obligations under the financial arrangement otherwise substantially cease; or


(c) you transfer to another person:


(i) a proportionate share of all of your rights and/or obligations under the financial arrangement; or

(ii) a right or obligation that you have under the financial arrangement to a specifically identified *financial benefit; or

(iii) a proportionate share of a right or obligation that you have under the financial arrangement to a specifically identified financial benefit.
Modifications for arrangements that are assets

250-265(2)  
The following modifications are made if the *financial arrangement is an asset of yours at the time the event referred to in subsection (1) occurs:


(a) paragraphs (1)(a) and (c) do not apply unless the effect of the transfer is to transfer to the other person substantially all the risks and rewards of ownership of the interest transferred;


(b) for the purposes of applying section 250-275 to the arrangement, you are treated as transferring a right under the arrangement to another person if:


(i) you retain the right but assume a new obligation; and

(ii) your assumption of the new obligation has the same effect, in substance, as transferring the right to another person; and

(iii) the new obligation arises only to the extent to which the right to *financial benefits under the financial arrangement is satisfied; and

(iv) you cannot sell or pledge the right (other than as security in relation to the new obligation); and

(v) you must, under the new obligation, provide financial benefits you receive in relation to the right to the person to whom you owe the new obligation without delay.

 

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