Income Tax Act 2007 section 809Z8

Meaning of "the disposal proceeds"

Section 809Z8 defines how to calculate "the disposal proceeds" when an asset is sold or otherwise disposed of, including the rules for determining consideration and what counts as deductible agency fees.

• Disposal proceeds are the consideration received for a disposal, less any legitimate agency fees deducted before payment reaches the transferor or any other relevant person.
• Where consideration is non-monetary, it is valued at market value at the time of disposal; where a disposal is not at arm's length (including any disposal to a relevant person or someone connected to one), the consideration is deemed to be the market value of the asset immediately before disposal.
• Agency fees cover incidental costs charged by or through the person effecting the disposal, but exclude fees charged by a relevant person or fees that will benefit a relevant person.
• The exclusion of relevant-person fees does not apply where the relevant person genuinely provided a service in connection with the disposal and the fee does not exceed what would be charged on normal commercial arm's length terms.