Description
Section 100A – Update – A Further Perspective – BBlood Enterprises Pty Ltd v Commissioner of Taxation [2022] FCA 1112.
A recurring issue since the release of the draft ruling (TR 2022/D1) and the draft practical compliance guideline by the ATO in February 2022 (PCG 2022/D1) , for the small to medium practice, is the potential application of section 100A to transactions undertaken by trustees and to certain distributions of trust income to beneficiaries. In particular, the potential application of the anti-avoidance provision in the context of trust distributions to adult beneficiaries.
On 19 September 2022, the Federal Court handed down its decision in relation to the application of section 100A in BBlood. Whilst the factual matter of the case was complex, the court addressed some key issues with respect to section 100A including the following:
- What is an ordinary family and commercial dealing in the context of applying section 100A?
- What is a reimbursement agreement?
- Does a ‘Tax Avoidance Purpose’ need to be a dominant purpose for section 100A to apply?
- Is the mere uploading of information by the Commissioner constitute an ‘assessment’? What are the implications for ‘amendment periods’?
- Is the definition in section 207-35 in relation to the franking of a dividend flawed in relation to section 99A assessments to trustees?
- Does dividend stripping apply to the structure of the transaction entered by the taxpayer?Recorded on 25 November 2022
Presented by Annemarie Wilmore
1 CPD Hour
