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The ATO has published a Decision Impact Statement in relation to the Full Federal Court decision in RCI Pty Limited v FCT [2011] FCAFC 104; 2011 ATC 20-275. The Commissioner's application for special leave to appeal to the High Court was dismissed - see FCT v RCI Pty Limited [2012] HCATrans 29.

The decision concerned whether the Commissioner was correct in determining that the general anti-avoidance provisions of Part IVA ITAA 1936 applied in the circumstances of a particular transaction entered into by the taxpayer. The Full Federal Court held that Part IVA did not apply to the scheme identified by the Commissioner because it did not obtain a tax benefit.

The Decision Impact Statement states:

"The Commissioner accepts that the decision is authority for the propositions set out above under the heading 'Issues decided by the Full Federal Court'."

However, it also states the following qualification:

"The views outlined...represent the views of the Commissioner in relation to the application of Pt IVA as it currently stands. Those views are subject to the prospect of legislative change taking effect from 1 March 2012, as announced by the former Assistant Treasurer on that date."

Finally, the Decision Impact Statement states:

"The Commissioner considers that it will be desirable to update Law Administration Practice Statement PS LA 2005/24 (Application of General Anti-Avoidance Rules) in view of recent court decisions on Part IVA, but considers that it would be more efficient to await the outcomes from the Assistant Treasurer's announcement of legislative changes before publishing any revision of that Statement."


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