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09 Dec 09 Discretionary Option Arrangement - TA 2009/18

In a media release issued on 8 December 2009, the ATO warned people to be wary of arrangements that attempt to artificially create up-front deductions for employment costs through discretionary option arrangements.Under these arrangements, an employer makes a cash contribution to a trustee of a trust. The trust then pays the cash contribution back to the employer as consideration for acquiring options from the employer.

The Commissioner, Michael D’Ascenzo, said the ATO is looking closely at these arrangements.

“These transactions may not comply with tax laws and anti-avoidance rules may apply,” Mr D’Ascenzo said.

On the same day, the ATO issued Taxpayer Alert TA 2009/18 entitled "Discretionary Option Arrangement".

For a copy of the ATO media release, No 2009/64, go here

For a copy of TA 2009/18, go here


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