Document ID: chunk:federal_register_of_legislation:F2017L00231:body:0:p3
Version: federal_register_of_legislation:F2017L00231
Segment Type: other
Provision Reference: 
Character Range: 4897–7221

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 Secretary must comply in making a determination under subsection 1208H (1) of the Act.
12 Effect of unsecured loan on value of assets
  In relation to an unsecured loan, the Secretary must take into account:
 (a) whether a transaction that gave rise to the loan was an arm's length transaction, having regard to the criteria described in section 13; and
 (b) the matters referred to in section 14.
13 Criteria for arm's length transaction
 (1) For paragraph 12 (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.
14 Other matters
  For paragraph 12 (b), the Secretary 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) whether the loan is secured by a charge or encumbrance over an asset other than an asset described in paragraph 1208H (1) (b) of the Act; and
 (c) the commercial, social and familial relationships (if any) between the parties to the transaction; and
 (d) the nature and circumstances of the transaction.