ITA 2007, Pt. 12A, Ch. 1 provides that ‘in certain circumstances where a transfer is made regarding land, and the transferor or an associate becomes liable to make a payment connected with the land, income tax relief for the payment is restricted.’

(ITA 2007, s. 681A).

Transactions caught by Chapter 1

There are four situations identified by the legislation. All four require that ‘land, or an estate or interest in land, is transferred’.

The first two situations then apply where ‘the transferor, or a person associated with the transferor, becomes liable to make a payment of rent under a lease of the land or part of it’, and:

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