What power does section 925D of the Income Tax Act 2007 grant the Treasury?

Section 925D grants the Treasury the authority to make regulations modifying the manufactured payments rules in sections 925A to 925F. These regulations can adapt the rules for non-standard repo cases as defined in section 925E, for redemption arrangements, or for both types of case together, including incidental and transitional provisions.

What is a redemption arrangement under section 925D?

A redemption arrangement exists where arrangements similar to a standard repo are made for securities due to be redeemed after sale. Instead of a right or obligation to repurchase the securities, the person has a right or obligation relating to the benefits flowing from the redemption of those securities, capturing the redemption proceeds.

When is a company treated as having a repo for the purposes of section 925D?

A company is treated as having a repo if it has a creditor repo, creditor quasi-repo, debtor repo, or debtor quasi-repo under Chapter 10 of Part 6 of CTA 2009. It is also treated as having a repo if the anti-avoidance rule in section 547 of CTA 2009 deems it to have a creditor repo.

What can the Treasury's regulations under section 925D include?

Regulations made under section 925D may include incidental, supplemental, consequential, and transitional provisions, as well as savings to preserve existing rules where appropriate. The term 'modifications' is broadly defined and includes both exceptions to and omissions from the standard manufactured payments rules in sections 925A to 925F.

Income Tax Act 2007 section 925D

Power to modify repo sections

Section 925D grants the Treasury the power to make regulations that modify the rules in sections 925A to 925F concerning manufactured payments in relation to non-standard repo cases, redemption arrangements, or both.

The Treasury may make regulations to modify the repo rules (sections 925A to 925F) for non-standard repo cases, redemption arrangements, or both types of case together.
A redemption arrangement arises where arrangements similar to a repo are made for securities due to be redeemed after sale, and a person has rights or obligations over the redemption proceeds rather than a right or obligation to repurchase the securities.
The regulations may include incidental, supplemental, consequential, and transitional provisions, and the term "modifications" includes exceptions and omissions.
A company is treated as having a repo if it has a creditor repo, creditor quasi-repo, debtor repo, or debtor quasi-repo under Chapter 10 of Part 6 of CTA 2009, or if it has a creditor repo by virtue of the anti-avoidance rule in section 547 of that Act.

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member