Income Tax Act 2007 section 809RZD

Effect where 30-day deadline is met

Section 809RZD sets out the tax consequences when a breach of the TRF deposit rule is corrected by transferring the required amount out of the TRF capital account within the permitted 30-day grace period.

• Where the required amount is transferred out of the TRF capital account within 30 days of a breach, the mixed fund rules treat the breach as if it never happened.
• The prohibited sums are treated as having been transferred directly from their original source into the destination account, bypassing the TRF capital account entirely.
• If the annualised basis rules assumed single transfers occurred during the intervening period, those steps must be re-applied taking account of the corrected position.
• If more than one qualifying transfer of the required amount is made within the 30-day grace period, only the first such transfer counts as the corrective transfer.