Prior to the Amendments
Many of the terms being used under the Bright line test and interest limitation rules have been defined but not updated in accordance with changes to the bright-line test.
Proposed Amendments
The amendments will update the following defined terms to better reflect their relevance in terms of the bright-line test and interest limitation rules.
- Business premises
The bill proposes to repeal the definition of business premises in S DD 11 and move the substantive definition to S YA 1.
- Principal Settlor
The term “principal settlor” is relevant when determining whether rollover relief is available, whether the main home exception applies for the bright line test and in certain family trust situations. To account for the now broader application of the term the redundant definition will be repealed.
- Settlement
The definition of settlement is defined in both S YA 1 and CB 16A(7) the bill proposes to remove the definition in CB 16A(7) and the definition in YA 1 will continue to apply.
Effective Date
The proposed amendments will take effect from 27 March 2021.
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