Miscellaneous 2017

The new s 974'80 - more obscure than ever

Source: Australian Tax Forum Journal Article

Published Date: 1 Dec 2017


The classification for Australian tax purposes of financing arrangements involving multiple instruments or disparate parties has been problematic for at least a decade. The recent proposals to revise these provisions will change current law but not obviously improve it. One step in the legislation " the rules about when to aggregate multiple instruments" is detailed, complex and inconsistent. The second step " just how the debt and equity tests are applied where there are multiple instruments
" and the third step " what the consequences are and for whom, which are meant to follow from aggregation, are ignored. And the decision to create and rely on a new type of legislative instrument makes the endeavour even more uncertain. The article analyses the design of the new provisions and some of the questions which arise from the decision to employ a new type of legislative instrument to elucidate the basic design.

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Miscellaneous 2017

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