Published on 09 Sep 04
by VICTORIAN DIVISION, THE TAX INSTITUTE
1 July 2001 heralded a whole new approach to the taxation classification of debt and equity interests. The rules are complex and encompassing. There has been a further extension for at call loans and a carve-out for certain taxpayers. It is important to understand the practical impact of the debt equity rules on loan arrangements and what you need to do to ensure unforeseen impacts do not occur. The issues covered in this paper include:
- identifying debt and equity interests?
- at call loans and the transitional period up to 30/6/04
- the consequences of a loan being a debt or equity interest
- maximum 10 year terms and charging of interest
- documentation requirements.
Neil Ward FTIA leads the Deloitte Australian Financial Services Tax Group. He has more than 30 years experience in advising in tax. Prior to joining Deloitte in March 2000, Neil spent 12 years with the ANZ Banking Group in Australia and the United Kingdom. Neil is recognised as one of the leading tax advisers on financial arrangements, foreign exchange, thin capitalisation, capital management, withholding tax and infrastructure transactions.
- Current at
06 May 2009