Income Tax Act 2007 section 564K

Diminishing shared ownership arrangements

Section 564K defines which payments made by the customer under diminishing shared ownership arrangements qualify as alternative finance return, and which payments are excluded from that treatment.

• Payments made by the customer under diminishing shared ownership arrangements are generally treated as alternative finance return for income tax purposes.
• Payments that represent the purchase price for acquiring the financier's beneficial interest in the asset are excluded from being alternative finance return.
• Payments for arrangement fees, legal costs, or other expenses that the customer is required to pay under the arrangements are also excluded from being alternative finance return.
• The term "customer" has the same meaning as in the sections defining diminishing shared ownership arrangements and their refinancing (sections 564D and 564DA).