Income Tax Act 2007 section 564N

Alternative finance return under arrangements for trade or property business purposes

Section 564N allows alternative finance return payments to be treated as deductible business expenses where the underlying arrangements are used for trade or property business purposes.

• The section applies where a person enters into alternative finance arrangements for the purposes of a trade, profession, vocation, or property business
• Any alternative finance return paid under those arrangements is treated as an allowable expense of that trade or business
• For the purposes of claiming incidental finance costs, alternative finance arrangements are treated as equivalent to loans
• Alternative finance return is treated as equivalent to interest, ensuring parity of treatment with conventional financing