Anti-avoidance Income tax 2017

Fragmenting the Pt IVA lore applying to stapled structures

Source: The Tax Specialist Journal Article

Published Date: 1 Aug 2017


In TA 2017/1, the Australian Taxation Office expressed concern with arrangements which attempt to fragment integrated trading businesses in order to re-characterise trading income into more favourably taxed passive income. Among such arrangements, the ATO singled out stapled security structures, of which it identified four types: financing, rentals, royalties, and synthetics. The Commonwealth Treasury is also currently consulting on the integrity risks regarding the use of stapled structures. In that context, this article is concerned with rental stapled structures, and the extent, if any, to which Pt IVA of the Income Tax Assessment Act 1936 might apply to such structures. The author seeks to address what are seen as shortcomings and a lack of analysis in the ATO's apparent views on the matter, as expressed in its public pronouncements. The article identifies types of rental stapled structures and analyses the possible application of Pt IVA to them.

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Anti-avoidance Income tax 2017

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