Income Tax Act 2007 section 534

Exemption for transactions in deposits

Section 534 provides an income tax exemption for charitable trusts on profits arising from transactions in certificates of deposit, eligible debt securities, and uncertificated deposit rights, provided the proceeds are applied to charitable purposes.

• Profits or gains from disposing of exempt deposit rights are excluded from a charitable trust's total income calculation, but only to the extent those profits are applied to charitable purposes.
• Exercising an exempt deposit right counts as a disposal of that right, except where the right is simply a right to receive interest.
• Exempt deposit rights cover three categories: rights arising from eligible debt securities held in dematerialised form, rights to receive principal under a certificate of deposit, and uncertificated rights to receive principal from a money deposit.
• Key terms such as "eligible debt security", "uncertificated", and "unit" take their meanings from the Uncertificated Securities Regulations 2001.