Earn out arrangements and draft Taxation Ruling TR 2007/D10.
19 Aug 09 |
AUSTRALIAN TAX REVIEW
Issue: Vol 38 No 3 2009
Pages: pp. 181-193
This article considers the way in which the capital gains tax (CGT) provisions and related tax rules apply, or should apply, to earn out arrangements. After considering draft Taxation Ruling TR 2007/D10, the article considers what constitutes the proceeds or the money required to be paid for CGT purposes, the distinction between money and a debt, and a significant body of cases developed in a like situation in respect of stamp duty. It concludes by suggesting that a system of reassessment is authorised by the applicable taxation laws, as the facts become known, and that should be preferred to the split asset approach of draft TR 2007/D10.
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Bernie Walrut, CTA practises as a barrister, whilst primarily undertaking advice work, he does appear in the Supreme and Federal Courts and tribunals in taxation and valuation matters. Whilst practising broadly in commercial work over four decades, of recent times his work has been predominantly taxation, trusts and estates, succession planning, commercial and valuation matters and some major commercial and infrastructure projects. Bernie holds an LLB and Masters degrees in Taxation, Law, Information Technology and Aquaculture and a PhD from the University of British Columbia.
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31 October 2017