2202.This interpretative section is based on sections 767A and 767AA of ICTA.
2203.Subsection (3) makes an exception to the general rule laid down by subsection (2). Suppose A sells a company to B without intending to avoid tax and B enters into a company purchase scheme with C: B may be liable under this Chapter but A may not. The rationale is that A can be expected to ensure, when selling the company to B, that B does not behave in a way which would trigger this Chapter, but A cannot be expected to ensure that B does not enter into arrangements with C whereby C triggers this Chapter. Subsection (3) begins “But if …” to make it clear that subsection(2) is subject to subsection (3).
Introduction Overview Overview Section 709: Meaning of “the relevant period”