Income Tax Act 2007 section 564V

Exclusion of alternative finance return from consideration for sale of assets

Section 564V ensures that, when assets are sold under alternative finance arrangements, the alternative finance return element is stripped out of the sale and purchase consideration for income tax purposes.

• Under purchase and resale arrangements, diminishing shared ownership arrangements, and investment bond arrangements, the alternative finance return is excluded from the consideration for the sale and purchase of the asset for income tax purposes.
• Each type of arrangement retains its own specific defining section (564C for purchase and resale, 564D or 564DA for diminishing shared ownership, and 564G for investment bonds) where the return is still recognised.
• This exclusion prevents the finance return from being treated as part of the asset's price, keeping the capital and financing elements separate.
• The section does not override any other provision in the Tax Acts or the Taxation of Chargeable Gains Act 1992 that substitutes a deemed consideration in place of the actual consideration.