TR 2010/3 on UPEs and Div 7A: An unwelcome U-turn?
Source: The Tax Specialist Journal Article
Published Date: 1 Apr 2015
The utilisation of unpaid present entitlements by close-knit groups involving trusts and private corporate beneficiaries to retain working capital at the corporate tax rate was so prevalent that it became a cause for concern. In response, in 2009, the ATO took an unwelcome U-turn to regard certain unpaid present entitlements (UPEs) as loans. In the absence of judicial authority, the ATO faced a daunting task of using Div 7A of the Income Tax Assessment Act 1936 (Cth) to regulate UPEs against a backdrop of well-established legal and equitable principles. The result is TR 2010/3, which leaves taxpayers and advisers in an unsatisfactory state of flux, with significant administrative, commercial and legal ramifications.
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Details
- Published By: Cindy Chan
- Published On:1 Apr 2015
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