Document ID: chunk:federal_register_of_legislation:F2015L00068:front:0:p24
Version: federal_register_of_legislation:F2015L00068
Segment Type: other
Provision Reference: 
Character Range: 62500–65186

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.

Part 3 Excluded charge or encumbrance

7 Purpose of Part 3

  This Part sets out decision-making principles with which the Commission must comply for the purposes of making a determination under subsection 52ZZT (6) of the Act.

8 Determination that charge or encumbrance is excluded

  In relation to a charge or encumbrance, the Commission must take into account:
 (a) whether a transaction that gave rise to the charge or encumbrance was an arm's length transaction, having regard to the criteria described in section 9; and
 (b) the matters referred to in section 10.

9 Criteria for arm's length transaction

 (1) For paragraph 8 (a), a transaction is an arm's length transaction if:
 (a) the transaction is for the purposes of the business activities of the company or trust; and
 (b) the transaction is made under a written agreement that is signed by each party to the agreement, and witnessed by an individual who is not a party to the transaction; and
 (c) each party to the transaction is:
 (i) at least 18 years old; or
 (ii) at least 16 years old and engaged in a full-time occupation; or
 (iii) at least 16 years old and receiving a social security entitlement; and
 (d) the transaction is made for an arm's length amount.

 (2) For subparagraph (1) (c) (ii), a full-time occupation:
 (a) includes any employment, trade, business, profession, vocation or calling; and
 (b) does not include a course of education at a school, college, university or similar institution.

10 Other matters

  For paragraph 8 (b), the Commission must also take into account, in relation to the transaction that gave rise to the charge or encumbrance:
 (a) whether the individual is the sole attributable stakeholder, or a member of a couple both members of which are the only 2 attributable stakeholders of the company or trust; and
 (b) the commercial, social and familial relationships (if any) between the parties to the transaction; and
 (c) the nature and circumstances of the transaction.

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

11 Purpose of Part 4

  This Part sets out decision-making principles with which the Commission must comply in making a determination under subsection 52ZZU (1) of the Act.

12 Effect of unsecured loan on value of assets

  In relation to an unsecured loan, the Commission must take into account:
 (a) whether a transaction that gave rise to the loan was an arm's length transaction,