Based on feedback from our members, and their concerns about the lack of technical guidance on the meaning of affiliate following the withdrawal of former Taxation Ruling TR 2002/6 Income tax: Simplified Tax System: eligibility – grouping rules (STS affiliate, control of non-fixed trusts) (the Ruling), The Tax Institute is writing to highlight the need for practical guidance from the Australian Taxation Office (ATO) on this subject.
The Ruling provided guidance on the application of the non-fixed trust control rule and simplified tax system (STS) affiliate under former Division 328 of the Income Tax Assessment Act 1997 (ITAA 1997). Following the repeal of the STS, the Commissioner withdrew the Ruling without replacement on the basis that it related to a now-repealed regime and had no ongoing relevance.
Although we agree that the original basis for the Ruling is obsolete, The Tax Institute considers that the withdrawn guidance about STS affiliates provides useful and contemporary guidance generally about the definition of an affiliate which remains a relevant concept in the current tax law.
The Tax Institute
Chief Tax Counsel
Tax Counsel Network
Australian Taxation Office
Robyn Jacobson, CTA
Senior Advocate, The Tax Institute
(03) 9603 2008.