Anti-avoidance Miscellaneous 2018

The application of Pt IVA to stapled structures

Source: The Tax Specialist Journal Article

Published Date: 1 Jun 2018


The ATO released TA 2017/1 on the re-characterisation of income from trading businesses in 2017. This article examines some of the issues raised in TA 2017/1, and whether Pt IVA of the Income Tax Assessment Act 1936 (Cth) might apply to arrangements which are said by the Commissioner to involve an artificial fragmentation of an integrated trading business in order to re-characterise trading income into more favourably taxed passive income. This article will also examine recent moves by the Commissioner to apply Pt IVA to upstream investment structures that utilise a mix of debt and equity. The authors conclude that, while the application of Pt IVA will always depend on the particular facts and circumstances of a given case, the mere fact that an infrastructure investment is acquired and held within a stapled structure will be insufficient to attract the operation of Pt IVA.

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Anti-avoidance Miscellaneous 2018

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