Liability arising from genuine arms-length transaction
9 Liability arising from genuine arms-length transaction
The Secretary must consider whether the specified liability arose from a genuine arm’s length transaction between the company or trust that owns the specified asset and another entity.
A transaction is taken to be a genuine arm’s length transaction for the purposes of subsection (1) if the transaction:
relates to an arrangement that relates to the specific business activities of the company or trust; and
is not with, or does not relate to an arrangement with, a person who is a minor; and
is made under a written agreement that is signed by each party to the agreement and witnessed by an independent person.
Provided the requirements in subsection (2) are met in relation to a transaction, the transaction may be a transaction between the company or trust that owns the specified asset and an individual who is the sole attributable stakeholder of the company or trust.
In this section:
minor means a person who has not turned 18, but does not include a person (other than a student) who:
has turned 16; and
is engaged on a full-time basis in an occupation, including an office, employment, trade, business, profession, vocation or calling.
student means a person who has turned 16, but has not turned 18, who is enrolled in a full-time course of study at a school, college, university or similar educational institution.
Part 4 Determination that asset is not controlled by individual
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