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INCOME TAX ASSESSMENT ACT 1997 - SECT 240.80 What happens if the arrangement is extended or renewed

INCOME TAX ASSESSMENT ACT 1997 - SECT 240.80

What happens if the arrangement is extended or renewed

  (1)   This section sets out what happens if, after the end of the * arrangement, the * notional buyer and * notional seller extend or renew the * arrangement.

  (2)   This Division applies as if the original * arrangement has ended and the extended arrangement or renewed arrangement is a separate arrangement (the new arrangement ).

  (3)   There is not, however, taken to be any disposal or acquisition as a result of the original arrangement ending or of the new arrangement starting and the * notional buyer does not cease to own the property.

  (4)   Also, the notional loan principal for the new loan is:

  (a)   if the * arrangement as extended or renewed states an amount as the cost or value of the property for the purposes of the extension or renewal and the * notional seller and the * notional buyer were dealing with each other at * arm's length in connection with the extension or renewal--the amount so stated; or

  (b)   otherwise--the amount that could reasonably have been expected to have been paid by the notional buyer for the purchase of the property if:

  (i)   the notional seller had actually sold the property to the notional buyer when the arrangement was extended or renewed; and

  (ii)   the notional seller and notional buyer were dealing with each other at arm's length in connection with the sale.

  (5)   Subdivision   240 - G applies to the notional loan for the original arrangement. For that purpose, the notional loan principal for the new arrangement is taken to be a * termination amount paid to the * notional seller under the original arrangement.

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