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The new Pt IVA – Interpretation and litigation issues


When Pt IVA of the Income Tax Assessment Act 1936, the general anti-avoidance provision, was amended in 2013, the procedural structure of Pt IVA was left largely intact, but significant amendments were made to the test in relation to the existence of a “tax benefit”. The changes make it necessary to first identify a “tax effect” within the meaning of s 177CB. This article examines a range of interpretative and litigation issues raised by the amended provision. The cases which precipitated the amendments are first examined. This is followed by a detailed examination of the central provision, s 177CB, including its introduction, and the tax benefit control mechanism.

The article then discusses a number of issues with the section, including the concept of a tax benefit that “would have” occurred. The discussion turns to s 177D and concludes with some final comments about possible tax outcomes.

Author profile

Brendan Sullivan CTA
Brendan Sullivan, SC CTA, is a Barrister-at-Law, with chambers at 10th floor Selborne specialising in revenue law matters. He has been a member of The Tax Institute for more than 30 years. Brendan has practised as a Barrister for 27 years and as Senior Counsel since 1998. His practice involves both advising on taxation matters, and the conduct of taxation appeals before the courts. He has substantial experience in dealing with taxation appeals from both sides, regularly representing both taxpayers and the ATO. He also has extensive experience in the conduct of taxation disputes at the audit level. - Current at 24 November 2014
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