Income Tax Act 2007 section 809BZG

Relevant change in relation to partnership

Section 809BZG defines what constitutes a "relevant change" in relation to a partnership for the purposes of the disguised interest rules, and identifies the person involved in that change.

• A relevant change occurs if either the lender (or a connected person) joins the partnership in connection with the arrangement (Condition A), or a member's profit share changes in connection with the arrangement where that member is the lender, connected to the lender, or becomes connected to the lender (Condition B).
• An event is treated as occurring "in connection with" the arrangement if it happens directly or indirectly as a consequence of it, or is otherwise connected with it — this is drawn broadly to catch indirect links.
• Where Condition A is met, the "person involved in the change" is the individual who becomes a member of the partnership; where Condition B is met, it is the member whose profit share changes.
• The concept of a relevant change feeds into the definitions of both type 2 and type 3 finance arrangements under sections 809BZF and 809BZJ respectively.