Whilst the Consultation Paper examines some of the issues raised in the TA2017/1, it is seeking to undertake a wider examination of the use and consequences of such structures and how Australia may differ from other jurisdictions. On its own this alert has been causing a number of issues for investors, including those seeking FIRB approval in relation to existing and new investments.Ī link to our previous Alert on TA 2017/1 can be found here. The Consultation Paper comes after the Australian Taxation Office ( ATO) released, on 31 January 2017, Taxpayer Alert 2017/1 ( TA2017/1) which sets out the ATO's concerns with a variety of arrangements that, in the words of the Commissioner of Taxation, " … attempt to fragment integrated trading businesses in order to re-characterise trading income into more favourably taxed passive income".
On 24 March 2017, the Australian Government released its Stapled Structure Consultation Paper ( Consultation Paper) seeking submissions on potential policy options to address issues that may arise in relation to stapled structures, the taxation of real property investments and other arrangements to re-characterise trading income.Ī link to the Consultation Paper can be found here. The Government says it is concerned that stapled structures, which have become a common investment structure (ironically sponsored by a number of State and Commonwealth privatisations), are artificially re-characterising active trading income as "rent", thereby attracting a concessional tax outcome. This article was written by Scott Heezen, Mark Upfold and Anthony Mourginos.Ī new Australian Government consultation paper signals a potentially dramatic change to the income tax treatment of stapled structures, with wide ramifications for the Australian infrastructure sector.
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