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21 Apr 11 Division 7A Working Party

Noel Beharis FTIA (Dominion Private Clients) and Tax Counsel Deepti Paton ATIA attended a meeting of the Division 7A Working Partyo on Monday 18 April 2011. At this meeting participants discussed the recently released PS LA 2843 on the application of the Commissioner's discretion to disregard a deemed dividend under section 109RB.

Participants noted that this PS LA is improved since the last draft, but that stakeholders would like a number of further amendments, including:

  • clarification that corrective action does not need to have been taken in order for a mistake to have been honest or an omission to have been inadvertent.
  • greater clarification of the ATO's view on whether a decision in relation to the Commissioner's discretion under section 109RB is reviewable.
  • greater clarification on what the Commissioner considers to be 'corrective action'
  • clarification of the manner in which the obtaining of advice from a tax adviser affects the application of the discretion.

The ATO undertook to review the PS LA in light of these comments prior to finalisation.

Members interested in contributing to The Tax Institute's submission on this PS LA are encouraged to contact us at Tax Policy.

The ATO also undertook to consider (in consultation with stakeholders) the best manner in which to publicise its view in relation to the interaction of section 100A and Division 7A (as raised at the NTLG meeting of 30 March). The ATO also undertook to provide responses to other issues raised at the meeting.

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