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The new Pt IVA – Interpretation and litigation issues

Published on 01 Aug 14 by "THE TAX SPECIALIST" JOURNAL ARTICLE

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.

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Brendan SULLIVAN

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