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Section 100A

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The ATO is focussing on arrangements that may constitute “reimbursement agreements” — which broadly involve making distributions to lower taxed beneficiaries and directing the economic benefits to another entity.

The ATO notes that the other entity is often a controller of a privately owned group, close relatives of the controller or an entity within such a group, and is concerned that some of these arrangements have been entered into in order to avoid tax.  The ATO has an unlimited period within which to make an assessment under these provisions.

The ATO is in the midst of drafting a taxation ruling intended to set out their views on the exclusions from a reimbursement agreement for agreements not entered into with the purpose of eliminating or reducing someone’s income tax, and agreements entered into in the course of ordinary family or commercial dealings.  The expected completion date is June 2021.

For more information, you can view our recent webinar on Section 100A (presented by Partner Paul Sokolowski and Senior Associate Kaitilin Lowdon) below.