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Ruling

Subject: Limited recourse borrowing arrangements

Issue 1

Non-concessional contributions

Question

Is the difference between a deemed market rate of interest expense and the actual interest expense of the Fund for the income year ended 30 June 2012 a non-concessional contribution to Member 1 and Member 2 for the 2011-12 financial year in accordance with section 292-90 of the Income Tax Assessment Act 1997 (ITAA 1997)

Answer

No

Issue 2

Non-arm's length income

Question

Will the non-arm's length income provision in section 295-550 of the ITAA 1997 apply to the Fund in respect of the difference between a deemed market rate of interest expense and the actual interest expense for the 2011-12 income year?

Answer

Yes

Issue 3

General anti-avoidance provisions

Question

Will the provisions of Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936) be applied to the limited recourse borrowing arrangement (the Loan Agreement) in the 2011-12 income year?

Answer

The Commissioner has not yet ruled.

This ruling applies for the following period:

Income year ended 30 June 2012.

The scheme commences on:

During the income year ended 30 June 2012.

Relevant facts and circumstances

The Fund is a complying self-managed superannuation fund.

There are four members in the Fund and they are all related. Member 1 and Member 2 are each other's spouse and parents of Member 3 and Member 4.

The trustee of the Fund (the Fund Trustee) is a private company.

All the members of the Fund are directors of the Fund Trustee.

The shareholders of the Fund Trustee are Member 1 and Member 2.

Another private company (the Holding Trustee) as a bare trustee for the Fund, acquired a commercial property (the Property).

The Property was acquired from Member 1 and Member 2 (as partners in a partnership (the Partnership)) pursuant to a Deed for the Transfer of Land in the 2008-09 income year.

It is stated that the Property was purchased at market value of the Property prior to its acquisition.

The Holding Trustee was appointed to hold the property as bare trustee for the Fund by a Deed of Bare Trust (the Holding Trust Deed) in the 2008-09 income year.

The acquisition of the Property was financed by way of a loan (the Loan) from Member 1 and Member 2 (in the Partnership) equal to the purchase price of the Property. The Loan is in the nature of a limited recourse borrowing arrangement (LRBA).

The terms of the Loan are set out in an agreement (the Loan Agreement).

As far as relevant, the Loan Agreement provides that:

• Interest on any drawdowns shall accrue at the Rate; and at such intervals as agreed between the Parties from time to time

• Rate means such interest rate as agreed between the Parties from time to time.

• Commencement date for the term of the Loan occurs on the date of the first draw down of any amount of the Facility Amount.

• The term of the loan is seven years from the last day of the Financial Year in which the Commencement Date occurs or as otherwise agreed to from time to time by the parties.

• The Loan is to be repaid by the Borrower by way of repayments of principal and interest (periodic repayments) to be paid on the last business day of each financial year unless otherwise agreed between the Parties.

• The Borrower must repay the total amount outstanding at the expiration of the term of the Loan.

• Member 1 and Member 2 are to accept repayment of any additional portion of the outstanding balance of the loan at any time and any such additional repayment must be applied to reducing the loan principal.

The record of certificate of title indicates that a mortgage of the Property to Member 1 and Member 2 was registered on a specific date in the 2011-2012 income year.

The repayments of the Loan have been made from the Fund to Member 1 and Member 2 (in the Partnership) on normal commercial terms. In relation to the income year ended 30 June 2011 a commercial rate of interest of more than 7% per annum was applied to the Loan.

The applicant advised that payments 'were made in respect of the loan' in the 2011-12 and 2012-13 income years:

The Fund's income tax returns show interest expenses for the 2008-09, 2009-10 and 2010-11 income years.

In the 2012-13 income year, the Fund Trustee applied for a private ruling for the 2011-12 income year stating that the Lender and the Fund Trustee wish to apply a 0% rate of interest to the Loan. The ruling asks, in part, whether the non-arm's length income provision under the ITAA 1997 or the general anti-avoidance provision (Part IVA of the ITAA 1936) would apply to the rent derived by the Fund in relation to the Property if Member 1 and Member 2 were to agree with the Fund that no interest were to be payable in the 2011-12 income year. (The 2010-11 income year return is most recent return lodged by the Fund).

Recently, you advised that for the income year ended 30 June 2012, subject to the outcome of the private ruling application, the Borrower and the Lender have agreed to treat the whole repayment of the loan amount as being a payment of principal. The Lender charged $0 interest to the Borrower for the income year ended 30 June 20012, pursuant to the terms of the Loan Agreement. For the income year ended 30 June 2013, subject to the outcome of the private ruling application, the Borrower and the Lender have agreed to treat the whole repayment of the loan amount as being a payment of principal. The Lender charged $0 interest to the Borrower for the income year ended 30 June 2013, pursuant to the terms of the Loan Agreement.

The Fund's financial statements and income tax return for the 2010-11 income year indicate that the borrowings were reduced in that year.

It is stated that during the 2011-12 income year the Property was leased to an unrelated third party.

Relevant legislative provisions

Income Tax Assessment Act 1936 Former Subsection 273(7)

Income Tax Assessment Act 1936 Former paragraph 273(7)(a)

Income Tax Assessment Act 1936 Former paragraph 273(7)(b)

Income Tax Assessment Act 1997 Division 292

Income Tax Assessment Act 1997 Subsection 295-550.

Income Tax Assessment Act 1997 Subsection 295-550(4).

Income Tax Assessment Act 1997 Subsection 295-550(5)).

Income Tax Assessment Act 1936 Part IVA

Income Tax Assessment Act 1997 Paragraph 295-550(5)(a)

Income Tax Assessment Act 1997 Paragraph 295-550(5)(b)

Income Tax Assessment Act 1997 Subsection 995-1(1)

Reasons for decision

NOTE : See end of ruling for footnote references

Summary

The difference between a deemed market rate of interest expense and the actual interest expense of the Fund does not increase the capital of the Fund. Therefore, the interest saving achieved by the Fund from a reduction in interest rate will not be a non-concessional contribution for Member 1 and Member 2 in the 2011-12 financial year.

Income derived by the Fund through the Holding Trust will be non-arm's length income of the Fund in accordance with subsection 295-550(5) of the ITAA 1997

The Commissioner has not yet ruled on whether Part IVA of the ITAA 1936 will apply to the LRBA.

Detailed reasoning

Meaning of 'contribution'

Division 292 of the ITAA 1997 limits the superannuation contributions made in a financial year for a person that receive concessionally taxed treatment. It sets out rules to determine a taxpayer's liability to 'excess contributions tax' on superannuation contributions exceeding specified 'contribution caps'.

The term 'contribution' is not defined in the ITAA 1997. Therefore, consistent with basic principles of statutory interpretation, the term 'contribution' is to be given its ordinary meaning having regard to the context and underlying purpose of the legislative provisions in which the term appears.

The Commissioner's view on the meaning of 'contribution' in the superannuation context is set out in Taxation Ruling TR 2010/1 (TR 2010/1). At paragraph 4, TR 2010/1 states:

In the superannuation context, a contribution is anything of value that increases the capital of a superannuation fund provided by a person whose purpose is to benefit one or more particular members of the fund or all of the members in general.

Where, as here, an arrangement is put in place to ensure that a superannuation fund does not incur a liability to meet certain expenses, as illustrated by the examples in paragraphs 75; 76; 81 and 82 of TR 2010/1, there is no increase in the capital of the superannuation fund and no contribution is made to the superannuation fund under the arrangement.

Accordingly, the difference between a deemed market rate of interest expense and the actual interest expense of the Fund for the income year ended 30 June 2012 would not be considered a non-concessional contribution for Member 1 and Member 2 for the 2011-12 financial year.

Non-arm's length income

Amounts of ordinary income or statutory income of a superannuation fund that are non-arm's length income of a fund are set out in subsection 295-550 of the ITAA 1997. Relevantly, income that is derived by a fund as a beneficiary of a trust is dealt with in subsections 295-550(4) and (5) of the ITAA 1997.

Subsection 295-550(4) of the ITAA 1997 covers income derived by a complying superannuation fund through a trust by way of holding other than a fixed entitlement to the income of the trust. Subsection 295-550(5) of the ITAA 1997covers income derived by the fund through a trust by way of holding a fixed entitlement to the income of the trust.

Fixed entitlement to trust income

Taxation Ruling TR 2006/7 explains what amounts are considered to be 'special income' under former section 273 of the ITAA 1936 which was repealed with effect from 1 July 2007. Former section 273 has been re-written, with some modifications, in section 295-550 of the ITAA 1997. To the extent that section 295-550 of the ITAA 1997 expresses the same ideas as former section 273, TR 2006/7 is also taken to be a ruling about section 295-550 of the ITAA 1997.

In accordance with paragraph 101 of TR 2006/7, if a complying superannuation fund derives income from a trust by way of the trustee or any other person exercising a discretion, the income distributed will be non-arm's length income of the fund under subsection 295-550(4) of the ITAA 1997.

A trust distribution to a complying superannuation fund will fall within subsection 295-550(5) of the ITAA 1997 rather than subsection 295-550(4) of the ITAA 1997 only if the fund's entitlement to the distribution does not depend upon the exercise of the trustee's, or any other person's discretion, that is, if the fund holds a fixed entitlement to the income of the trust.¹

In all cases, the determining factor in deciding if a fixed entitlement exists is the terms of the trust instrument under which the trust is constituted. In this case, that instrument is the Holding Trust Deed.

As far as relevant, the Holding Trust Deed states:

The Trustee declares and the Beneficiary acknowledges that to the extent that the Trustee is successful in acquiring the Asset, the Trustee holds the Asset as trustee for and on behalf of and for the absolute use and benefit of the Beneficiary, subject to and upon the terms and conditions set out in this Deed.²

To the extent that the Trustee is successful in acquiring the Asset, the Beneficiary is absolutely entitled to the benefit of the Asset together with all earnings, profits or gains accrued or to accrue in respect of the Asset.³

The Beneficiary indemnifies the Trustee against all costs, damages, losses, expenses, demands and actions which may be suffered or incurred by the Trustee in respect to the acquisition and the holding of the Asset and to generally save and hold harmless the Trustee any and all actions arising with respect to the acquisition and holding of the Asset.⁴

Together, these clauses of the Holding Trust Deed indicate that the parties intend the Fund to have a fixed entitlement to the income of the Holding Trust. Therefore, to determine whether income derived by the Fund through the Holding Trust is non-arm's length income of the Fund, consideration must be given to subsection 295-550(5) of the ITAA 1997. If that conclusion was incorrect, income derived by the Fund as beneficiary of the Holding Trust would be non-arm's length income of the Fund under subsection 295-550(4) of the ITAA 1997.

Subsection 295-550(5) of the ITAA 1997 provides that income derived by the Fund as a beneficiary of the Holding Trust through holding a fixed entitlement to the income of the trust will be non-arm's length income of the Fund if:

a) the Fund acquired the entitlement under a scheme, or the income was derived under a scheme, the parties to which were not dealing with each other at arm's length; and

b) the amount of the income is more than the amount that the Fund might have been expected to derive if those parties had been dealing with each other at arm's length.

Meaning of 'scheme'

The term 'scheme' is defined in subsection 995-1(1) of the ITAA 1997 to mean:

a) any arrangement; or

b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.

The term 'arrangement' is also defined in subsection 995-1(1) of the ITAA 1997 to mean:

… any arrangement, agreement, understanding, promise or undertaking, whether expressed or implied, and whether or not enforceable (or intended to be enforceable) by legal proceedings'.

The Full Federal Court in Allen v Federal Commissioner of Taxation⁵ considered the term 'arrangement' as defined for the purposes of former subsection 273(7) of the ITAA 1936 - the immediate predecessor of subsection 295-550(5) of the ITAA 1997. That term was defined in the ITAA 1936 in terms almost identical to the combination of the definitions of 'scheme' and 'arrangement' in the ITAA 1997. The court held that the series of steps undertaken by the parties that resulted in the acquisition of a fixed interest in the trust estate and the relevant distribution of income from that trust estate were readily seen to be an 'arrangement' to which the various entities were parties, and those results were readily seen to be the consequence of that arrangement.

Similarly, for the purposes of applying subsection 295-550(5) of the ITAA 1997 in the present case, the scheme involves the series of steps including:

n the acquisition of the Property from Member 1 and Member 2;

n the establishment and operation of the Holding Trust in favour of the Fund in respect of the Property acquired from Member 1 and Member 2;

n the acquisition by the Fund of a fixed entitlement to the income of the Holding Trust and the derivation of income by the Fund through holding that entitlement;

n the establishment and operation of the LRBA between the Fund and Member 1 and Member 2; and

n the subsequent reduction of interest in respect of the LRBA from more than 7% to 0% per annum.

Further, the scheme encompasses any agreement made by the parties to the Loan concerning the repayment of the principal or adjustment to the terms of the Loan.

As such, it is readily concluded that, for the purposes of paragraph 295-550(5)(a) of the ITAA 1997, the Fund would acquire its fixed entitlement to the income of the Holding Trust under a scheme, and any income derived through holding that entitlement would be derived under a scheme.

Not dealing at arm's length

In accordance with subsection 995-1(1) of the ITAA 1997, in determining whether parties are dealing at arm's length, consideration is to be given to any connection between them and any other relevant circumstances.

In Federal Commissioner of Taxation v AXA Asia Pacific Holdings Ltd (AXA)⁶ Dowsett J summarised propositions which emerge from the numerous cases in which the expression 'not dealing with each other at arm's length' or similar expressions have been considered, as follows:

• in determining whether parties have dealt with each other at arm's length in a particular transaction, one may have regard to the relationship between them;

• one must also examine the circumstances of the transaction and the context in which it occurred;

• one should do so with a view to determining whether or not the parties have conducted the transaction in a way which one would expect of parties dealing at arm's length in such a transaction;

• relevant factors which may emerge include existing mutual duties, liabilities, obligations, cross-ownership of assets, or identity of interests which might enable either party to influence or control the other, or induce either party to serve a common interest and so modify the terms on which strangers would deal;

• where the parties are not in an arm's length relationship, one may infer that they did not deal with each other at arm's length, and that the resultant transaction is not at arm's length;

• however related parties may, in some circumstances, so conduct a dealing as to displace any inference based on the relationship;

• un-related parties may, on occasions, deal with each other in such a way that the resultant transaction may not properly be considered to be at arm's length.

In that case Edmonds and Gordon JJ further stated that:

Any assessment of whether parties were dealing at arm's length involves 'an assessment [of] whether in respect of that dealing they dealt with each other as arm's length parties would normally do, so that the outcome of their dealing is a matter of real bargaining': …

Further, the Full Federal Court in Allen⁷ held that former paragraph 273(7)(a) of the ITAA 1936 - the immediate predecessor of paragraph 295-550(5)(a) of the ITAA 1997 - does not require that the 'dealing' consist only of the actual derivation of the income in question by 'the entity', but that the evident legislative intention of the provisions is to permit regard to be had to the totality of the steps that result in the entity's acquisition of its fixed entitlement to the income of the trust and any derivation of income by the entity through holding that entitlement.

In this case, it is necessary to have regard to the establishment and operation of the LRBA between the Fund and Member 1 and Member 2 (which includes the establishment and operation of the Holding Trust in favour of the Fund in respect of the asset acquired with the borrowed money).

It is clear that the parties in this case are not in an arm's length relationship. This view is based on the fact that Member 1 and Member 2 are:

n members of the Fund;

n directors and shareholders of the Fund Trustee;

n the vendors of the Property;

n directors and shareholders of the Holding Trustee; and

n the Lenders.

Consequently, as Dowsett J stated in AXA, it may be inferred that the dealing between the parties is not at arm's length. That being the case, it is necessary to consider whether the terms of the dealing between the parties can displace the inference based on the relationship of the parties.

Various aspects of the scheme are considered below to determine whether the inference that parties are not dealing at arm's length may indeed be displaced:

▪ Purchase price - we have been advised that the purchase price of the Property reflects a professional market valuation of the Property prior to its acquisition. However, when a vendor finances a purchaser's acquisition of property, it is common for the vendor to require repayment of a principal somewhat higher than the actual purchase price, or is otherwise compensated for providing such finance by adding an additional debt.⁸ As in this case neither occurred, this factor may be neutral at best, or indicate a non-arm's length dealing.

▪ Loan amount - the entire amount of the purchase price was lent. Typically, as the loan value ratio (LVR) is relevant to the lender limiting their loss, high LVR loans are generally provided where the risk of default and loss are small. To help mitigate the risk associated with high LVR, lenders will generally require additional terms such as mortgage insurance or an-upfront risk fee (approximately 1.5% of the loan's value).⁹. In this case there is no mortgage insurance or upfront risk fee paid under the Loan Agreement.

Similarly, if the Fund were to have borrowed from an independent lender, it could not reasonably have expected to borrow the entire purchase price without additional security. Typically, commercial lenders will only lend between 60% to 70% on the value of a commercial property.¹⁰ Alternatively, a commercial lender prepared to lend 100% of the value of commercial property would insist on security over the asset acquired with the borrowed money.

This factor would indicate a non-arm's length dealing.

▪ Loan term - the maximum term of the loan is less than 10 years, but may be extended by agreement between the parties. This particular loan term is a significantly shorter period than that generally offered by vendor financing companies or traditional lenders, which is typically 25 to 30 years. However, vendor finance companies also tend to encourage borrowers to refinance their loans with mainstream lenders after they have acquired sufficient equity in the property.¹¹ Though the term of the loan is shorter than most loans (albeit with the ability to be varied to a longer term) given the lack of features providing a return of investment or profit in respect of the principal, this is still a considerable amount of time. While the term itself may be indicative of arm's length dealing, the flexibility to vary the term, especially if this was to a longer term, would indicate a non-arm's length dealing.

▪ Payments of principal - the Loan requires periodic annual repayments of principal and interest and allows the Fund to make additional payments of principal. Nothing in the Loan Agreement indicates that the Loan would be interest-only for any specified period. Yet there was no reduction of principal between commencement of the Loan in the 2008-09 income year, or in the year ended 30 June 2010. No evidence has been provided to indicate there is an agreed payment schedule in respect of the Loan principal. The principal was reduced by only a small amount by 30 June 2011. Substantial payments were made in the 2011-12 and 2012-13 income years which the applicant has effectively stated will be treated as being entirely payments of principal if a favourable ruling is obtained. It is to be inferred that if a favourable ruling is not obtained, the parties will seek to re-characterise the payments as comprising principal and interest. The lack of an agreed repayment schedule and the purported ability to re-characterise payments as either principal or interest after the income year in which they have been paid would indicate a non-arm's length dealing.

▪ Interest rate - for the income years from 2009 to 2011, an interest rate of more than 7% has been paid in relation to the Loan. Though historical interest rates for limited recourse loans are not available, it is generally accepted that because of the nature of the limited recourse, loans of this type typically have higher interest rates.¹² Published statistics by the Reserve Bank of Australia show that in May 2009 the standard variable interest rate for a residential house loan was 5.75% and for a secured small business loan was 7.9%. In this case, as the Loan was in relation to commercial property (not residential property) and was a limited recourse borrowing (thus attracting a higher interest rate) it is considered that the interest rate of more than 7% would be indicative of an arm's length dealing. However, a variation of the interest rate from more than 7% to 0% would indicate a non-arm's length dealing. An arm's length financier would expect to be compensated for the loss of the ability to use their capital to earn income.

▪ Security - the Loan Agreement contains standard clauses regarding the borrower's obligations to maintain the land in good condition and to repair and insure the Property. It also requires the lender's agreement to any improvements to the land. Such terms are consistent with an arm's length dealing.

However, the record of certificate of title provided states that a mortgage of the land to Member 1 and Member 2 was registered in the 2011-12 income year. The failure to have their interest in the Property properly recognised for more than two years after the Loan was made would indicate a non-arm's length dealing. However, the eventual recognition of the mortgage is consistent with an arm's length dealing.

Assessing the circumstances holistically, the Commissioner considers that though there are factors that indicate both arm's length and non-arm's length dealing between the parties, on a balance of probabilities it is more probable than not that the Fund's entitlement to the Holding Trust income is acquired under a scheme, the parties to which were not dealing with each other at arm's length. Since the Loan's commencement in the 2008-09 income year, the variation of the interest rate from more than 7% to 0% only reinforces the non-arm's length nature of the parties' dealings. The scheme lacks commercial or economic substance as Member 1 and Member 2 (as lenders) forgo the economic benefits of the loaned money in a manner an arm's length lender would not.

Amount of income greater than might be expected if dealing at arm's length

The final requirement of subsection 295-550(5) of the ITAA 1997, which is set out in paragraph 295-550(5)(b), is that the amount of the income (derived by the entity as a beneficiary of a trust through holding a fixed entitlement to the income of the trust) is more than the amount that the entity might have been expected to derive if the parties had been dealing with each other at arm's length.

The Full Federal Court in Allen¹³ observed in relation to former paragraph 273(7)(b) of the ITAA 1936¹⁴ and the mischief to which the provisions were directed, that this requires a comparison between a hypothetical arm's length dealing and what actually occurred. The 'hypothetical situation' that the 'actual dealing' is to be compared with is that which 'might have been expected to apply' if the parties to the arrangement had been dealing at arm's length.¹⁵

If the parties in this case were dealing with each other at arm's length, the amount of income the Fund might be expected to derive through the Holding Trust is either:

▪ nil - on the basis that:

• in respect of the initial loan, no lending on the proposed terms by the lender might be expected and therefore no income might be expected to be derived by the Fund through the Holding Trust.

• it would also be nil upon the variation of the interest rate from more than 7% to 0%, as no arm's length party would provide capital or refinance capital based on the terms of the loan, including the varied interest rate, and therefore no income might be expected to be derived by the Fund through the Holding Trust; or

▪ is less than under the proposed arrangement - on the basis that:

• the lender might be expected to lend on commercial terms that involve lower than 100% LVR given the nature of the asset to be acquired with the borrowed money and the limited recourse nature of the loans. Therefore, the substantially lower borrowed amounts available to be invested might be expected to generate less income to be derived by the Fund through the Holding Trust than under the proposed arrangement.

• without the reduction of interest rate to 0%, the income that might be expected to be derived by the Fund through the Holding Trust would be reduced by the amount of interest payable in respect of the Loan.

Either way, the final requirement of subsection 295-550(5) of the ITAA 1997 is satisfied. This conclusion is analogous to the conclusion of the Full Federal Court in Allen¹⁶ which stated:

'It requires little imagination to see that if the parties to the movement of funds in this case had been at arm's length, there would have been no distribution to the Super Fund. The usual expectation of humankind is that one gets what one pays for'.

Part IVA of the ITAA 1936

The Commissioner has not yet ruled concerning the application of Part IVA of the ITAA 1936 in relation to the scheme the subject of the private ruling application in respect of the 2012 income year.

Please be aware that, if contrary to our ruling in respect of non-arm's length income for Fund for the 2012 income year, the non-arm's length income provisions do not so apply, it is our preliminary view that Part IVA of the ITAA 1936 could apply in the circumstances so as to give the Commissioner the power to cancel tax benefits obtained by Member 1 and Member 2 in connection with a scheme.

¹ TR 2006/7 paragraph 102.

² Clause 2.1 of the HoldingTrust Deed.

³ Clause 2.2 of the Holding Trust Deed.

⁴ Clause 5 of the Holding Trust Deed.

⁵ [2011] FCAFC 118; (2011) 2011 ATC 20-277; [2012] ALMD 3059; (2011) 84 ATR 853.

⁶ [2010] FCAFC 134; (2010) 189 FCR 204; (2010) 2010 ATC 20-224; [2011] ALMD 2345; (2010) 81 ATR 180 - Federal Court of Australia

⁷ [2011] FCAFC 118; (2011) 2011 ATC 20-277; [2012] ALMD 3059; (2011) 84 ATR 853.

⁸ Reserve Bank of Australia Bulletin October 2003, Recent Development in Low-deposit Loans, report prepared by Marianne Gizycki and Michelle Wright of Domestic Markets Department, 4-5.

⁹ Reserve Bank of Australia Bulletin October 2003, Recent Development in Low-deposit Loans, report prepared by Marianne Gizycki and Michelle Wright of Domestic Markets Department, 3.

¹⁰ Michelle Wilson Mysmsuper, Limited recourse borrowing arrangements fact sheet March 2012; http://www.mysmsuper.com/FactSheets/12.%20Limited-Recourse-Borrowing-Arrangements-Fact-Sheet-March-2012.pdf; Commonwealth Bank Self Managed Super Funds, 2014; https://www.commbank.com.au/business/investments-super/self-managed-super.html

¹¹ Reserve Bank of Australia Bulletin October 2003, Recent Development in Low-deposit Loans, report prepared by Marianne Gizycki and Michelle Wright of Domestic Markets Department,5.

¹² Mark Ratcliff 'Limited Recourse Borrowing' Australian Journal of Financial Planning 2011, vol 6, no. 2.

¹³ Allen v Federal Commissioner of Taxation (2011) 195 FCR 416, 429; [2011] FCAFC 118; (2011) 2011 ATC 20-277; [2012] ALMD 3059; (2011) 84 ATR 853.

¹⁴ a provision worded substantively the same as 295-550(5)(b) of the ITAA 1997

¹⁵ Allen v Federal Commissioner of Taxation (2011) 195 FCR 416, 429; [2011] FCAFC 118; (2011) 2011 ATC 20-277; [2012] ALMD 3059; (2011) 84 ATR 853

¹⁶ Allen v Federal Commissioner of Taxation (2011) 195 FCR 416; [2011] FCAFC 118; (2011) 2011 ATC 20-277; [2012] ALMD 3059; (2011) 84 ATR 853