RF 12FAdjustments: first year additional amounts

1. This section applies for the first income year in which a lender derives non-resident financial arrangement income under a financial arrangement. It increases the lender’s income by adding an amount that the lender would have derived if the financial arrangement had always given rise to non-resident financial arrangement income.

2. The amount is calculated using the formula—

   $total\; accrual\; income\; -\; total\; interest.$

   Where:

3. In the formula,—

4. total accrual income is the total expenditure incurred by the borrower under the arrangement to the extent to which the arrangement is held by a non-resident person for the period that—
   1. starts on the date on which the borrower became party to the arrangement; and
   2. ends on the last day of the income year that precedes the first income year:
5. total interest is the total interest paid by the borrower to all non-residents for the period that—
   1. starts on the date on which the borrower became party to the arrangement; and
   2. ends on the NRFAI due date for the borrower’s income year.

Notes

• Section RF 12F: inserted, on 30 March 2017, by section 279 (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).