Section 564E — Income Tax Act 2007: Deposit arrangements

Deposit arrangements 564E 1 This section applies to arrangements if under them—

a a person (“the depositor”) deposits money with a financial institution, b the money, together with money deposited with the institution by other persons, is used by it with a view to producing a profit, c from time to time the institution makes or credits a payment to the depositor out of profit resulting from the use of the money, d the payment is in proportion to the amount deposited by the depositor, and e the payments so made or credited by the institution equate, in substance, to the return on an investment of money at interest.

2 This section is subject to section 564H (provision not at arm's length: exclusion of arrangements from sections 564C and 564D, this section and sections 564F and 564G).