Document ID: chunk:federal_register_of_legislation:F2015L00068:front:0:p23
Version: federal_register_of_legislation:F2015L00068
Segment Type: other
Provision Reference: 
Character Range: 59941–62710

3

 8Determination that charge or encumbrance is excluded

 9Criteria for arm's length transaction

 10Other matters

Part 4 Effect of loan not secured by charge or encumbrance over asset of company or trust

 11Purpose of Part 4

 12Effect of unsecured loan on value of assets

 13Criteria for arm's length transaction

 14Other matters

Part 1 Preliminary

1 Name of Principles

  These Principles are the Veterans' Entitlements (Attribution of Assets) Principles 2001.

2 Commencement

  These Principles commence when the Veterans' Affairs (Legislative Instrument Re-making Exercise) Instrument 2014 commences.

3 Definition

  In these Principles:
Act means the Veterans' Entitlements Act 1986;
social security entitlement has the same meaning it has in the Social Security Act 1991.

4 Purpose

  These Principles set out decision-making principles with which the Commission must comply for the purposes of making a determination under subsection 52ZZR (2), 52ZZT (6) or 52ZZU(1) of the Act.

Part 2 Excluded assets

5 Purpose of Part 2

  This Part sets out decision-making principles with which the Commission must comply for the purposes of making a determination under subsection 52ZZR (2) of the Act.

6 Excluded asset — capital transfer by genuine investor

 (1) This section applies if an individual (the investor), who is not an attributable stakeholder of a company, makes a genuine transfer of capital to the company for shares in the company.

 (2) This section also applies if an individual (the investor), who is not an attributable stakeholder of a trust, makes a genuine transfer of capital to the trust for units in the trust.

 (3) For subsections (1) and (2), a transfer of capital is a genuine transfer of capital if:
 (a) the investor is over 18 years; and
 (b) the investor receives, as consideration for the transfer, shares in the company, or units in the trust, of a value that is equivalent to the value of the capital transferred; and
 (c) the investor has a legal or equitable right to a share of the capital on the winding-up of the company or trust; and
 (d) the investor has a legal or equitable right to receive dividends or distributions under the constituent documents of the company or the terms of the trust.

 (4) The Commission must consider the extent to which capital transferred in accordance with subsection (3) should be determined to be an excluded asset in relation to an attributable stakeholder of the company or trust, having regard to:
 (a) the value of the capital transferred to the company or trust; and
 (b) the value of shares or units received by the investor; and
 (c) the extent, if any, to which the value of the capital would not be required to be disregarded by any express provision of the Act.