Income Tax Act 2007 section 809RZA

Transfers into TRF capital account

Section 809RZA sets out the rules for how transfers from mixed funds into a Temporary Repatriation Facility (TRF) capital account are treated, and what happens when the transfer amount exceeds the TRF capital available in the mixed fund.

• A transfer from a mixed fund to a TRF capital account is treated as a transfer of TRF capital, provided the transfer amount does not exceed the TRF capital held in that mixed fund at the time of transfer.
• If the transfer amount exceeds the available TRF capital in the mixed fund, the transfer is automatically split into two separate transfers treated as occurring one immediately after the other.
• The first deemed transfer equals the amount of TRF capital in the mixed fund and qualifies for TRF capital treatment; the second transfer covers the excess and does not, which may cause the TRF capital account to lose its TRF capital account status.
• Separate provisions in sections 809RZB, 809RZC and 809RZD govern the nomination of a TRF capital account and the consequences of transferring amounts that are not TRF capital into one.

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