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Is the deemed in-house asset rule unconstitutional?

Published on 01 Nov 18 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The deemed in-house asset rule in s 71(4) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SISA) is one of the most fundamental provisions in the Act, particularly in respect of the regulation of SMSFs. Section 71(4) gives to the relevant “regulator” under the SISA for a particular superannuation fund (either APRA or ASIC for larger superannuation funds, or the Commissioner of Taxation for small (five or fewer members) SMSFs) a discretion to deem an asset of a superannuation fund which is not an in-house asset to be in the in-house asset of the fund. This article analyses the deemed in-house asset rule against the recent case of Aussiegolfa v FCT, where the constitutional validity of s 71(4) was questioned by a member of the Full Federal Court. The consequences of breaching the in-house asset rule and the constitutional prohibition against the imposition of an arbitrary tax are also examined in this article.

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Christopher Bevan CTA
Chris is a Barrister Wentworth Chambers. - Current at 06 August 2018
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