Changes to financial arrangements rules

On 27 September 2012, the Minister of Revenue announced amended legislation to close a loophole in the income tax rules relating to financial arrangements.
The present rules allow taxpayers to elect to treat a short-term arrangement for the sale and purchase of property or services as a financial arrangement. This gives a taxpayer the possibility of claiming a tax deduction for either the cost of acquiring the agreement or any losses on its disposal. Conceptually, the agreements should b…