Income Tax Act 2007 section 809RD

Effect where 30-day deadline is met

Section 809RD sets out what happens when a breach of the deposit rule for a qualifying account is corrected within the 30-day deadline by transferring the required amount out of the account.

• Where the required amount is transferred out within 30 days, the mixed fund rules apply as though the prohibited sums had never passed through the qualifying account but had instead gone directly to the destination account or property
• The "intervening transactions" that are effectively ignored are the payments of prohibited sums into the qualifying account and the single one-off transfer out of it
• If a deemed single transfer arose under the year-end or cessation calculations during the intervening period, the mixed fund rules must be reapplied to that transfer taking account of the fiction that the intervening transactions never occurred
• If more than one transfer equal to the required amount leaves the qualifying account within the 30-day grace period, only the first such transfer counts as the corrective one-off transfer