Income Tax Act 2007 section 614B

Arrangements to which this Chapter applies

Section 614B defines which leasing arrangements fall within the scope of this Chapter, based on their accounting treatment and the nature of the return on investment.

• The Chapter applies to arrangements involving the lease of any property or rights that meet two conditions (Condition A and Condition B)
• Condition A requires that the arrangements are treated as a finance lease or loan under generally accepted accounting practice (GAAP)
• Condition B requires that some or all of the lessor's return on investment is not in the form of rent and would not otherwise be fully taxed as rental income
• The rules apply regardless of when the arrangements were entered into or whether the parties involved are companies or individuals