Document ID: chunk:federal_register_of_legislation:F2017L00231:body:0:p1
Version: federal_register_of_legislation:F2017L00231
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Social Security (Attribution of Assets) Principles 2017

I, FINN PRATT, Secretary of the Department of Social Services, formulate these Principles under section 1209E of the Social Security Act 1991.

Dated    8 March 2017

Finn Pratt
Secretary of the Department of Social Services

Contents

Page
Part 1 Preliminary
 1 Name of Principles
 2 Commencement
 3 Definition
 4 Purpose
Part 2 Excluded assets
 5 Purpose of Part 2
 6 Excluded asset — capital transfer by genuine investor
Part 3 Excluded charge or encumbrance
 7 Purpose of Part 3
 8 Determination that charge or encumbrance is excluded
 9 Criteria for arm's length transaction
 10 Other matters

Part 4 Effect of loan not secured by charge or encumbrance over asset of company or trust
 11 Purpose of Part 4
 12 Effect of unsecured loan on value of assets
 13 Criteria for arm's length transaction
 14 Other matters

Part 1 Preliminary

1 Name of Principles
  These Principles are the Social Security (Attribution of Assets) Principles 2017.
2 Commencement
  These Principles commence on 1 April 2017.
3 Definition
  In these Principles:
Act means the Social Security Act 1991.
4 Purpose
  These Principles set out decision-making principles with which the Secretary must comply for the purposes of making a determination under subsection 1208E (2), 1208G (6) or 1208H (1) of the Act.

Part 2 Excluded assets
5 Purpose of Part 2
  This Part sets out decision-making principles with which the Secretary must comply for the purposes of making a determination under subsection 1208E (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 Secretary must consider the extent to which capital transferred in accordance with subsection (3) should be