Income Tax Act 2007 section 571

Meaning of "related" agreements

Section 571 defines when agreements are considered to be "related" to one another for the purposes of the tax avoidance provisions concerning arrangements involving the transfer of income streams and securities.

• Two or more agreements are "related" if they are entered into in pursuance of the same arrangement or scheme, or if one is entered into as a consequence of, or in connection with, another.
• The definition captures agreements that are linked commercially or structurally, even if they involve different parties or are entered into at different times.
• The concept of "related" agreements is important because the anti-avoidance rules in this part of the Act can apply to a series of connected transactions taken together, not just to individual standalone agreements.
• This broad definition helps prevent avoidance schemes that rely on splitting a single commercial arrangement into multiple separate agreements to circumvent the tax rules.