Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 235 - Particular financial transactions  

Subdivision 235-I - Instalment trusts  

Operative provisions

SECTION 235-830   What trusts are covered - instalment trust arrangements  

235-830(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) .

235-830(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.

235-830(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).