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The increasing use and threat of section 100A


Section 100A of the Income Tax Assessment Act 1936 (Cth) was enacted in 1978 to deal with a specific form of tax avoidance referred to as “trust stripping”. Subsequent judicial comments have suggested, however, that the provisions potentially have broader reach. Nevertheless, s 100A does not apply to “ordinary family or commercial dealings” and the ATO has indicated it is preparing a draft taxation ruling that will set out the Commissioner’s preliminary views on that expression. This article suggests that, given the way in which family business and investment structures have developed over the last 40 years, a significant number of dealings — that regularly take place in 2020 between family members in relation to private companies and trusts — should be treated as “ordinary family dealings” for s 100A purposes. Section 100A should be used to prevent tax avoidance and not legitimate tax planning in a family context.

Author profile

Michael Butler CTA
Michael is the Partner in charge of the Finlaysons Tax & Revenue Group. Michael advises domestic and foreign clients on federal, international and state tax matters, and has a special interest in corporate restructurings, cross-border investment, property, wine and mining taxation, trusts, and estate and succession planning. Michael is a past chair of The Tax Institute’s South Australia State Council and a regular contributor to Institute events. - Current at 22 September 2021
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