Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 26/30)
Character Range: 4224990–4227597

of the penalty would be such as to discourage cancellation.
 (2) For these purposes, if a *member of the tax preferred sector defaults under an *arrangement and the arrangement is cancelled, the arrangement is to be taken to have been cancelled without the permission of an entity referred to in paragraph (1)(a).

250‑135  Level of expected financial benefits test

Effective guarantee or indemnity for value of asset
 (1) You lack a predominant economic interest in an asset at a particular time if the asset has a *guaranteed residual value at that time.

Likely financial benefits exceeding 70% limit
 (2) You also lack a predominant economic interest in an asset at a particular time if, at that time:
 (a) the *arrangement under which the asset is *put to the tax preferred use (either alone or together with any other arrangement in relation to the *tax preferred use of the asset or the *provision of *financial benefits in relation to the tax preferred use of the asset) is a *debt interest; or
 (b) the sum of the present values of the *expected financial benefits that *members of the tax preferred sector have provided, or are or are reasonably likely to provide, to you (or a *connected entity) in relation to the tax preferred use of the asset exceeds 70% of:
 (i) the *market value of the asset if subparagraph 250‑15(d)(i) applies; or
 (ii) so much of the market value of the asset as is attributable to the expenditure referred to subparagraph 250‑15(d)(ii) if that subparagraph applies.

250‑140  When to retest predominant economic interest under section 250‑135

Purpose for applying section
 (1) This section applies for the purposes of working out whether this Division applies to you and to an asset that is *put to a tax preferred use.

No need to keep retesting if section 250‑135 does not apply at start of tax preferred use of asset
 (2) If section 250‑135 does not apply to you and the asset at the time when the *tax preferred use of the asset starts, that section is taken, subject to subsection (4), to continue not to apply to you and the asset.
Note: This subsection means that if section 250‑135 does not apply to the arrangement when the tax preferred use of the asset starts, the arrangement does not need to be retested against section 250‑135 until a change of the kind referred to in subsection (4) occurs.

No need to keep retesting if section 250‑135 does not apply when you do something to increase value of expected financial benefits
 (3) If:
 (a) you (or a *connected entity), or a *member of the tax preferred sector, do something, or omit to do something, at a