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Structuring cross-border transactions: Part 1


TD 2019/D6 and TD 2019/D7 raise important considerations in international tax planning and the structuring of Australian investments, as all capital gains (whether foreign-sourced or not) that are attributed to a foreign resident beneficiary of an Australian resident trust are now assessable to that beneficiary, unless the trust is a fixed trust. The draft determinations are contentious due to a disconnect between the relevant legislative provisions and the ATO’s interpretation of them, and as they do not address Australia’s double tax agreements. Further, they lead to differing tax outcomes for foreign residents assessed on capital gains from the disposal of non-taxable Australian property, depending on the structure through which they derive that gain. Consequently, foreign resident taxpayers require more clarity on this aspect of Australian tax law.

Author profiles

Renuka Somers CTA
Renuka is the Senior Tax Advisor in the US-Australia Tax Desk at Asena Advisors in the US, and a consultant at HWL Ebsworth Lawyers, Australia. Her principal areas of practice are: US-Australia cross-border structuring, Australian federal taxes (income tax, mergers and acquisitions, CGT, Div 7A and tax consolidation), trusts and international estate planning for high wealth clients. She has written numerous articles for the Taxation in Australia and The Tax Specialist journals on these topics. Renuka has worked in large Australian law firms and international accounting firms, and has also served as a volunteer executive board member for a prominent Australian health promotion charity. - Current at 20 April 2020
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Peter Harper
Peter is the CEO of the Asena Group, a multi-family office. He has spent most of his career advising foreign-owned, privately held businesses and family offices on global structuring and US inbound investment. Peter's core focus is extracting value for family offices, and he believes in a “stakeholder framework” to corporate taxation. The “stakeholder framework” encompasses the development of a tax strategy that facilitates value for families, rather than for the portfolio companies that they invest in or manage. - Current at 20 April 2020
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