Plain language law

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EW 58: Financial arrangements, income, and expenditure relevant to criteria
or “Rules for calculating financial arrangements and related income or expenses”

You could also call this:

“Commissioner can decide you're not a cash basis person for tax purposes”

The Commissioner can decide that you’re not a cash basis person for a certain type of financial arrangement, even if you would normally be one. This can happen in two situations:

If you or someone else has set up and promoted the financial arrangement to delay paying income tax.
If you and the other person in the financial arrangement are connected (like family or business partners), and you’re working out the income and expenses from the arrangement differently from each other.

When the Commissioner makes this decision, it means you’ll have to follow different rules for calculating your income and expenses for that type of financial arrangement.

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Next up: EW 60: Trustee of deceased’s estate

or “How a deceased person's trustee handles their financial matters”

Home
Income Tax Act 2007
Timing and quantifying rules
Consideration when anti-avoidance provision applies
EW 59: Exclusion by Commissioner

Part E Timing and quantifying rules
Financial arrangements rules: Consideration when anti-avoidance provision applies

EW 59Exclusion by Commissioner

The Commissioner may treat a person who would otherwise be a cash basis person for a class of financial arrangements as not being a cash basis person for the class if—
the person, or any other person, has structured and promoted the class to defer an income tax liability:
the parties to a financial arrangement are associated, and the person's calculation of income and expenditure under the financial arrangement differs from that used by the associated person.

Notes