HR 10What happens when vehicle stops being transparent debt funding special purpose vehicle?

1. When a company or a trustee of a trust (the vehicle) stops being a debt funding special purpose vehicle for any reason, other than on unwind, and an election has been made under section HR 9BA or HZ 9 (Elections to treat existing debt funding special purpose vehicles as transparent) that relates to the special purpose vehicle, the following apply:

2. the relevant originator is treated as disposing of its property (the property) that has been subject to section HR 9(b) in relation to the vehicle immediately before the vehicle stops being a special purpose vehicle:
3. the vehicle is treated as acquiring the property immediately after the vehicle stops being a special purpose vehicle:
4. the relevant originator is treated as not being a party to an arrangement (the arrangement) that the originator was treated as being a party to under section HR 9(c) in relation to the vehicle immediately before the vehicle stops being a special purpose vehicle:
5. the vehicle is treated as being a party to the arrangement immediately after the vehicle stops being a special purpose vehicle.

6. The disposition of property in subsection (1)(a) and the acquisition of property in subsection (1)(b) are treated as occurring with a single third party for payments equal to the property’s market value.

7. At the time of the relevant originator becoming not a party to an arrangement, and the vehicle becoming a party to the arrangement, under subsection (1)(c) or (d),—

8. if the arrangement is a liability of the originator,—
   1. the vehicle is treated as receiving consideration equal to the market value of the liability, expressed as a positive amount, from a single third party:
   2. the originator is treated as paying consideration equal to the market value of the liability, expressed as a positive amount, to a single third party; or
9. if the arrangement is an asset of the originator,—
   1. the originator is treated as receiving consideration equal to the market value of the asset from a single third party:
   2. the vehicle is treated as paying consideration equal to the market value of the asset to a single third party.

10. In this section, unwind means a process, ignoring section HR 9, by which—

11. guarantees, securities, and debts, as applicable, described in the definition of debt funding special purpose vehicle, paragraph (d), are cancelled; and
12. interests described in the definition of debt funding special purpose vehicle, paragraph (b) are transferred to the relevant originator; and
13. the vehicle is terminated, by liquidation or otherwise.

14. This section overrides section HZ 10 (What happens when election is made under section HZ 9?).

15. This section does not give rise to a supply of goods or services under the Goods and Services Tax Act 1985.