Private ruling: Division 250 of the Income Tax Assessment Act 1997
Published: March 2014

Ruling: The ruling concerned the following: | 1. Will the 'assets' of the entity be put to a tax preferred use under section 250-60 of the Income Tax Assessment Act 1997 (ITAA 1997) if neither the entity, nor any of its connected entities, are a tax preferred entity? | 2. If the entity, or any of its connected entities, is a tax preferred entity and the 'assets' are put to a tax preferred use, is paragraph 250-15(c) of the ITAA 1997 satisfied when the financial benefits are received by the entity? | 3. If the answer to question 2 is affirmative, and assuming that Division 250 of the ITAA 1997 would otherwise apply to the entity and its 'assets', will the Commissioner make a determination under section 250-45 of the ITAA 1997 that Division 250 will not apply where the financial benefits are provided by: | • a tax preferred end user (or a connected entity) | • any tax preferred entity (or a connected entity), or | • any entity that is a foreign resident? | The Commissioner ruled that: | 1. No. The 'assets' of the entity will not be put to a tax preferred use under section 250-60 of the ITAA 1997 if neither the entity, nor any of its connected entities, are a tax preferred entity. | 2. Yes. If the entity, or any of its connected entities, is a tax preferred entity and the 'assets' are put to a tax preferred use, paragraph 250-15(c) of the ITAA 1997 is satisfied when the financial benefits are received by the entity. | 3. Yes. Given that the answer to question 2 is affirmative, and assuming that Division 250 of the ITAA 1997 would otherwise apply to the entity and its 'assets', the Commissioner will make a determination under section 250-45 of the ITAA 1997 that Division 250 will not apply where the financial benefits are provided by: | • a tax preferred end user (or a connected entity) | • any tax preferred entity (or a connected entity), or | • any entity that is a foreign resident.