Published on 01 Feb 15
by "THE TAX SPECIALIST" JOURNAL ARTICLE
Part IVA, the general anti-avoidance provision, of the Income Tax Assessment Act 1936 (Cth) was substantially amended in 2013 to eliminate some “perceived weaknesses” identified by the Australian Taxation Office in the then-existing provision. The 2013 amendments have themselves, however, raised many issues of statutory construction. The purpose of this article is to examine some of the most important issues likely to arise from the amendments, and to apply them in practice. The first part of the article provides context by way of presenting an overview of Pt IVA, and then explaining the relevant issues in detail, with reference to the decided cases. These include questions of determination of the tax benefit, statutory choice principles and purpose. The second part of the article then sets out worked examples of how Pt IVA, following the 2013 amendments, might apply to three real-world situations, namely, pre-sale dividends, share/asset sales, and funding choices.