Income Tax Act 2007 section 809AAZA

Application of Chapter

Section 809AAZA sets out when the anti-avoidance rules in this Chapter apply to arrangements where income rights are transferred between parties through a partnership structure.

• The Chapter targets arrangements where a person subject to income tax (the transferor) disposes of a right to income to another person (the transferee) through a partnership, and a main purpose of the disposal is to obtain a tax advantage
• Both the transferor and transferee must at some point be members of the relevant partnership or an associated partnership, though they need not be members at the same time
• The rules do not apply where the transferor and transferee are spouses or civil partners living together, or where they are siblings, ancestors, or lineal descendants of one another
• The definitions are drawn broadly: "arrangements" covers any agreement or series of transactions whether legally enforceable or not, "partnership" includes LLPs, and connected persons are treated as if they were the transferor or transferee themselves