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INCOME TAX ASSESSMENT ACT 1997 - SECT 235.830

What trusts are covered--instalment trust arrangements

             (1)  This section covers a trust if, under an * arrangement:

                     (a)  an entity (the investor ) makes a * borrowing, or is provided with credit; and

                     (b)  to secure the borrowing or provision of credit, the trustee of the trust acquires an asset or assets (the underlying investment ); and

                     (c)  the investor has a beneficial interest in the underlying investment as the sole beneficiary of the trust; and

                     (d)  for a provision of credit--the credit was provided to the investor to acquire the asset, or one of the assets, that comprises the underlying investment; and

                     (e)  the investor is entitled to the benefit of all income from the underlying investment; and

                      (f)  the investor is entitled to acquire legal ownership of the underlying investment on discharging its obligations relating to the borrowing or provision of credit.

Note:          For paragraph (c), the sole beneficiary of the trust may be 2 or more entities that have an interest in the trust as joint tenants or tenants in common: see subsection 235-815(3).

             (2)  However, this section does not cover a trust if the investor is a trustee of a * regulated superannuation fund and the * arrangement includes a * borrowing.

             (3)  This section does not cover a trust if the underlying investment is subject to any charge, security or other encumbrance (apart from any charge securing the obligations relating to the * borrowing or provision of credit).



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