Published on 01 Oct 14
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The equity override rule in s 974-80, which is part of the debt/equity rules contained in Div 974 of the Income Tax Assessment Act 1997 (Cth), is clearly in need of reform in order to provide taxpayers and the ATO with the certainty, coherence and simplicity once promised by the debt/equity rules. Some current developments, including a review by the Board of Taxation, have given hope that that reform will be achieved. This article sets out the background of s 974-80, its uncertain purpose, scope and application (including some particular areas of uncertainty), and then provides some context to the need for reform, including consideration of the ATO’s administration of the provision.
The article has particular regard to the section’s application to the infrastructure industry, where the uncertainty created by s 974-80 has affected listed entities and future investment structures.
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Chris is a Partner at PricewaterhouseCoopers.
Current at 1 August 2014
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