Income Tax Act 2007 section 809AZB

Value of transferred income stream treated as income

Section 809AZB determines how the value of a transferred income stream is calculated and taxed as income of the transferor, including the timing of when that income is treated as arising.

• The transferor is taxed on the higher of the actual consideration received or the market value of the right, where consideration is substantially below market value or absent.
• By default, the income is treated as arising in the chargeable period in which the transfer takes place.
• Where the receipts would have been taxed as trading or property income, the timing follows generally accepted accounting practice for recognising the consideration or market value in the transferor's accounts.
• Where the transferor is a company and it becomes apparent the income would not otherwise be fully recognised, the unrecognised amount is treated as arising immediately before that point becomes clear.