Income Tax Act 2007 section 809CZA

Loan or credit transaction defined

Section 809CZA defines what counts as a "loan or credit transaction" for the purposes of the anti-avoidance rules in sections 809CZB and 809CZC, which deal with certain payments being treated as yearly interest and tax charged on transferred income.

• A transaction qualifies as a loan or credit transaction if it relates to the lending of money, the giving of credit, or the varying of the terms of either
• It also qualifies if it is designed to enable or facilitate any arrangement connected with lending money or giving credit
• The definition catches transactions not only between the direct lender and borrower (or creditor and debtor) but also transactions involving persons connected with either party
• The rules are aimed at artificial arrangements that disguise what are in substance interest payments as something else, such as annuities or transfers of income-bearing assets