Income Tax Act 2007 section 773

Overview of Chapter

Section 773 provides an overview of the rules that impose an income tax charge on individuals who enter into arrangements designed to convert their employment or professional earnings into capital or other non-income receipts, with the aim of avoiding or reducing income tax.

• The chapter charges income tax on individuals who receive capital amounts (other than derivative property or rights) from arrangements that exploit their earning capacity in an occupation.
• It also charges income tax on individuals who receive derivative property or rights from such arrangements.
• The charge only applies where transactions or arrangements have been made to exploit an individual's earning capacity in an occupation.
• A key condition is that the main object, or one of the main objects, of the transactions or arrangements must be the avoidance or reduction of income tax liability.