The Government will change the definition of limited recourse debt in the Income Tax Assessment Act to overcome the impact of a High Court ruling last year.
A limited recourse debt will include arrangements where, at the beginning, the creditor’s rights against the debtor are limited wholly or predominantly to certain rights of the financed property or another property in the event of a default in payment of the debt.
Importantly, this definition will apply whether or not the creditor’s rights are established by contract.
In the May Budget, the Government announced...
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