Income Tax Act 2007 section 690

Receipt of assets of relevant company (circumstance E)

Section 690 sets out the fifth circumstance (Circumstance E) under which a person may be treated as having received income from a transaction in securities, specifically where the person receives assets of a relevant company.

• Four conditions must all be met for Circumstance E to apply to a person, covering the nature of the transaction and the receipt of company assets.
• The section targets situations where a person receives, or becomes entitled to receive, consideration in connection with the transfer, extinction, or reduction in value of shares or securities in a relevant company.
• The definition of "consideration" is deliberately broad — it extends beyond contractual payments to include any receipt of money or money's worth, even where there is no formal contractual obligation.
• The definitions of "security" and "share" used in this section are also broadly drawn to capture a wide range of financial instruments.