Income tax 2020

The increasing use and threat of section 100A

Source: The Tax Specialist Journal Article

Published Date: 1 Oct 2020


Section 100A of the Income Tax Assessment Act 1936 (Cth) was enacted in 1978 to deal with a specific form of tax avoidance referred to as trust stripping. Subsequent judicial comments have suggested, however, that the provisions potentially have broader reach. Nevertheless, s 100A does not apply to ordinary family or commercial dealings and the ATO has indicated it is preparing a draft taxation ruling that will set out the Commissioner's preliminary views on that expression. This article suggests that, given the way in which family business and investment structures have developed over the last 40 years, a significant number of dealings " that regularly take place in 2020 between family members in relation to private companies and trusts " should be treated as ordinary family dealings for s 100A purposes. Section 100A should be used to prevent tax avoidance and not legitimate tax planning in a family context.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Income tax 2020

Share this page