Debt Equity 2013

Trading one uncertainty for another? Ten years' experience with the debt-equity rules

Source: The Tax Specialist Journal Article

Published Date: 1 Aug 2013


The debt-equity rules in Div 974 of the Income Tax Assessment Act 1997 have now been in operation for more than 10 years. This article presents results from a survey, conducted by the authors, to gather and collate the views of tax professionals in industry and private practice. The particular focus of this article is on “the user experience”: how have the professionals and the institutions which have to work with these rules found them to operate in practice? The authors conclude that the debt-equity rules have not proved to be an unqualified success.

There are many problematic areas in the text of the law, it has not proved to be a robust and reliable test that is easily grasped and applied, and the search for the single organising principle has not been completely successful. However, there appears to be no appetite for major repeal; legislative tinkering and ongoing support by administrative guidance are seen to be preferable.

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  • Published By: Tony Frost
  • Published On:1 Aug 2013

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Debt Equity 2013

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