Income Tax Act 2007 section 599

Quasi-stock lending arrangements and quasi-cash collateral

Section 599 extends the manufactured payments rules in sections 597 and 598 to cover arrangements that achieve the same economic effect as stock lending with cash collateral, even though they do not technically fall within the formal definitions of "stock lending arrangement" or "cash collateral".

• Sections 597 and 598 deal with the tax treatment of manufactured payments arising from stock lending arrangements involving cash collateral
• Some arrangements achieve the same economic result as stock lending with cash collateral but fall outside the precise legal definitions of those terms
• Section 599 catches these "quasi" arrangements by applying the same rules as if they were genuine stock lending arrangements with cash collateral
• This prevents avoidance of the manufactured payments rules through structuring transactions to fall outside the technical definitions while replicating the same economic outcome