Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 2/30)
Character Range: 7786268–7788864

to a *financing arrangement, a circumstance occurs that would otherwise have attracted the operation of subsection 974‑110(1) or (2) in relation to the arrangement:
 (a) that subsection of section 974‑110 does not apply to change the result that subsection (4) of this section produces in relation to the arrangement; but
 (b) for the purpose of applying this Division in relation to the arrangement after subsection (4) of this section has ceased to have effect, that subsection of section 974‑110 is taken to have produced the result that it would have produced if subsection (4) of this section had not applied to the arrangement.

Further exception for certain related party at call loans
 (6) In applying this Division in relation to a particular *scheme and a particular income year (which may be the income year in which the scheme is entered into or a later income year), the scheme is taken not to give rise to an equity interest in a company, and instead to give rise to a debt interest in the company, if:
 (a) the scheme takes the form of a loan to the company that satisfies paragraphs (4)(a), (b) and (c); and
 (b) the company's *GST turnover (worked out at the end of the income year) is less than $20,000,000.
Note: If this subsection does not apply in relation to the previous income year or the next income year, and the scheme gives rise to an equity interest according to the other provisions of this Division, an adjustment to the company's non‑share capital account will occur at the end of the previous income year or the start of the next income year (see subsections 164‑15(2) and 164‑20(3)).
 (7) For the purpose of paragraph (6)(b), the question whether a company's *GST turnover (worked out at the end of an income year) is less than $20,000,000 is to be determined in accordance with subsection 188‑10(2) of the *GST Act, as if that amount of $20,000,000 were a turnover threshold for the purposes of that subsection of the GST Act.

974‑80  Equity interest arising from arrangement funding return through connected entities
 (1) This section deals with the situation in which:
 (a) an interest carries a right to a variable or fixed return from a company; and
 (b) the interest is held by a *connected entity of the company; and
 (c) apart from this section, the interest would not be an *equity interest in the company; and
 (ca) the *scheme that gives rise to the interest is a *financing arrangement for the company; and
 (d) there is a scheme, or a series of schemes, designed to operate so that the return to the connected entity is to be used to fund (directly