Private ruling: Employee Benefit Arrangement
Ruling period: Income Tax year ending 30 June 2011 | Income Tax year ending 30 June 2012 | Income Tax year ending 30 June 2013
Date scheme commenced: Income Tax year ending 30 June 2011

Ruling: Q1: Will the contributions of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. | Q2: Will the contributions of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 15-2 of the ITAA 1997? | A2: No. | Q3: Will the loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 6-5 of the ITAA 1997? | A3: No. | Q4: Will the loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 15-2 of the ITAA 1997? | A4: No. | Q5: Will the acquisition of Share Units by the Employee in return for payment of Market Value consideration be included as assessable income of the Employee under section 83A-25 of the ITAA 1997? | A5: No. | Q6: Will the issue of the Share Units to the Employee in return for payment of Market Value consideration, give rise to any assessable income under section 6-5 of the ITAA 1997 for the Employee? | A6: No. | Q7: Will the issue of the Share Units to the Employee in return for payment of Market Value consideration, give rise to any assessable income under section 15-2 of the ITAA 1997 for the Employee? | A7: No. | Q8: Will the first element of the CGT cost base of the Share Units acquired by the Employee, in accordance with section 110-25 of the ITAA 1997, equal the amount paid for those Share Units? | A8: Yes. | Q9: Will the distribution of dividends included in the calculation of the net income of the trust estate under section 95 of the Income Tax Assessment Act 1936 (ITAA 1936) by the Trustee to the Employee, to which the Employee is presently entitled, be included as assessable income of the Employee under section 97 of the ITAA 1936? | A9: Yes. | Q10: Will the proceeds received by the Employee upon redemption of the Share Units constitute assessable income under section 6-5 of the ITAA 1997? | A10: No. | Q11: Will the proceeds received by the Employee upon redemption of the Share Units constitute assessable income under section 15-2 of the ITAA 1997? | A11: No. | Q12: To the extent that any proceeds received on the redemption of the Share Units constitute assessable income for the Employee under the provisions of section 6-5 or section 15-2 of the ITAA 1997, will the net proceeds (i.e. gross proceeds less the cost of the Share Units) be assessable, rather than the gross proceeds? | A12: Yes. | Q13: To the extent that the proceeds received on the redemption of the Share Units do not constitute assessable income under section 6-5 or section 15-2 of the ITAA 1997 for the Employee: (a) will the redemption of the Share Units constitute a CGT event as set out in Division 104 of the ITAA 1997? | A15: Yes. | Q14: To the extent that the proceeds from any given redemption of Share Units are included in assessable income under section 6-5 or section 15-2 of the ITAA 1997 and are taken into account in calculating a net capital gain, will the anti-overlap provisions of section 118-20 of the ITAA 1997 operate to reduce the capital gain by the amount included in assessable income or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997? | A16: Yes. | Q15: If the Share Units are redeemed at a time that coincides with the cessation of the Employee's employment, will the proceeds on redemption be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? | A17: No. | Q16: Will Bonus Share Units issued to the Employee out of the corpus of the trust and in relation to the Employee's holding of Share Units, constitute assessable income under section 6-5 of the ITAA 1997? | A18: No. | Q17: Will Bonus Share Units issued to the Employee out of the corpus of the trust and in relation to the Employee's holding of Share Units, constitute assessable income under section 15-2 of the ITAA 1997? | A19: No. | Q18: To the extent that the issue of the Bonus Share Units does not constitute assessable income under section 6-5 or section 15-2 of the ITAA 1997 for the Employee: (a) will the provisions of subsection 130-20(3) of the ITAA 1997 apply to deem the Bonus Share Units to have been acquired when the Share Units were acquired and will the cost base be apportioned over both the Share Units and the Bonus Share Units? | A23: No. | Q19: If Bonus Share Units are issued to the Employee, and in relation to the Employee's holding of Share Units, at a time that coincides with the cessation of the Employee's employment, will the value of the Bonus Share Units be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? | A24: No. | Q20: Will the proceeds received by the Employee upon redemption of the Bonus Share Units issued and in relation to the Employee's holdings of Share Units constitute assessable income under section 6-5 of the ITAA 1997? | A25: Yes. | Q21: Will the proceeds received by the Employee upon redemption of the Bonus Share Units issued and in relation to the Employee's holdings of Share Units constitute assessable income under section 15-2 of the ITAA 1997? | A26: Yes, to the extent that the proceeds received by the Employee upon redemption of the Bonus Share Units is considered to be made to the Employee in respect of employment or services rendered by the Employee to the Employer. | Q22: To the extent that the proceeds from any given redemption of Bonus Share Units are included in assessable income under section 6-5 or section 15-2 of the ITAA 1997 and are taken into account in calculating a net capital gain, will the anti-overlap provisions of section 118-20 of the ITAA 1997 operate to reduce the capital gain by the amount included in assessable income or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997? | A27: Yes. | Q23: If Bonus Share Units are redeemed at a time that coincides with the cessation of the Employee's employment, will the proceeds on redemption be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? | A28: Decline to Rule. | Q24: If the Trustee, pursuant to the relevant clause of the Trust Deed, decides to pay salary to the Employee on behalf of the Employer, will the amounts paid to the Employee (including any amounts of Pay As You Go instalments withheld) be included as assessable income of the Employee under section 6-5 of the ITAA 1997? | A29: Yes. | Q25: If the Trustee, pursuant to the relevant clause of the Trust Deed, decides to provide rights to shares to the Employee at a full discount on behalf of the Employer, will the discounted rights provided to the Employee be included as assessable income of the Employee under section 83A-25 of the ITAA 1997? | A30: Yes.

Relevant facts and circumstances: The Employer intends to implement a long term equity plan for the purpose of providing a long term equity incentive structure to deliver equity based benefits to the Employee.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 44(1). | Income Tax Assessment Act 1936 Division 6. | Income Tax Assessment Act 1936 Section 95. | Income Tax Assessment Act 1936 Section 97. | Income Tax Assessment Act 1936 Division 13A. | Income Tax Assessment Act 1936 Section 139B. | Income Tax Assessment Act 1936 Subsection 139B(1). | Income Tax Assessment Act 1936 Section 139G. | Income Tax Assessment Act 1936 Division 1A. | Income Tax Assessment Act 1936 Section 160APHP. | Income Tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Section 15-2. | Income Tax Assessment Act 1997 Section 82-130. | Income Tax Assessment Act 1997 Division 102. | Income Tax Assessment Act 1997 Section 102-5. | Income Tax Assessment Act 1997 Division 104. | Income Tax Assessment Act 1997 Section 104-5. | Income Tax Assessment Act 1997 Section 104-25. | Income Tax Assessment Act 1997 Section 110-25. | Income Tax Assessment Act 1997 Subsection 110-25(2). | Income Tax Assessment Act 1997 Division 115. | Income Tax Assessment Act 1997 Section 118-20. | Income Tax Assessment Act 1997 Subsection 118-20(2). | Income Tax Assessment Act 1997 Subsection 118-20(3). | Income Tax Assessment Act 1997 Division 130. | Income Tax Assessment Act 1997 Subsection 130-20(3). | Income Tax Assessment Act 1997 Subdivision 207-B. | Income Tax Assessment Act 1997 Section 207-45. | Income Tax Assessment Act 1997 Subsection 207-50(3). | Income Tax Assessment Act 1997 Subsection 207-150(1). | Income Tax Assessment Act 1997 Paragraph 207-150(1)(a). | Taxation Administration Act 1953 Section 12-35 of Schedule 1.

Reasons for decision: Summary: Will the contributions of monies by the Employer Gold Limited (the Employer) to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? No. The Employee will not derive assessable income in respect of contributions of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed under section 6-5 of the ITAA 1997 as the amounts contributed to the Trustee are not actually received by the Employee or taken to have been received by the Employee. Will the contributions of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 15-2 of the ITAA 1997? No. The contributions of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed do not constitute statutory income of the Employee under section 15-2 of the ITAA 1997 as the contributions do not constitute allowances, gratuities, compensation, benefits, bonuses or premiums provided to the Employee or applied or dealt with in any way on the Employee behalf or as the Employee directs. Will the loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 6-5 of the ITAA 1997? No. The Employee will not derive assessable income in respect of loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed under section 6-5 of the ITAA 1997 as the amounts loaned to the Trustee are not income according to ordinary concepts and are not actually received by the Employee or taken to have been received by the Employee. Will the loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed be included as assessable income of the Employee under section 15-2 of the ITAA 1997? No. Loans of monies by the Employer to the Trustee pursuant to the relevant clause of the Trust Deed do not constitute statutory income of the Employee under section 15-2 of the ITAA 1997 as the loans do not constitute allowances, gratuities, compensation, benefits, bonuses or premiums provided to the Employee or applied or dealt with in any way on the Employee behalf or as the Employee directs. Will the acquisition of Share Units by the Employee in return for payment of Market Value consideration be included as assessable income of the Employee under section 83A-25 of the ITAA 1997? No. As the payment for the Share Units are made by the Employee and the application moneys are used by the Trustee to pay full Market Value for the Shares, then any interest the Employee acquires in the Shares is not acquired at a discount, thus section 83A-25 of the ITAA 1997 will not apply. Will the issue of the Share Units to the Employee in return for payment of Market Value consideration, give rise to any assessable income under section 6-5 of the ITAA 1997 for the Employee? No. Where the Employee pays Market Value consideration for Share Units in the Trust, the receipt of the Share Units by the Employee does not constitute income received or taken to have been received by the Employee for the purposes of section 6-5 of the ITAA 1997. Will the issue of the Share Units to the Employee in return for payment of Market Value consideration, give rise to any assessable income under section 15-2 of the ITAA 1997 for the Employee? No. Where the Employee pays Market Value consideration for Share Units in the Trust, the Share Units provided to the Employee do not constitute allowances, gratuities, compensation, benefits, bonuses or premiums provided to the Employee or applied or dealt with in any way on the Employee behalf or as the Employee directs for the purposes of section 15-2 of the ITAA 1997. Will the first element of the CGT cost base of the Share Units acquired by the Employee, in accordance with section 110-25 of the ITAA 1997, equal the amount paid for those Share Units? Yes. The cost base of a CGT asset has five elements (section 110-25 of the ITAA 1997). The first element includes the acquisition costs of the CGT asset which is the total of the money paid, or required to be paid and the Market Value of any other property given or required to be given in respect of the CGT asset (subsection 110-25(2) of the ITAA 1997). Will the distribution of dividends included in the calculation of the net income of the trust estate under section 95 of the Income Tax Assessment Act 1936 (ITAA 1936) by the Trustee to the Employee, to which the Employee is presently entitled, be included as assessable income of the Employee under section 97 of the ITAA 1936? Yes. Where the Employee is a beneficiary presently entitled to a share of the income of the trust estate, that share of the net income of the trust estate for the purposes of section 95 of the ITAA 1936 is included in the Employee assessable income under section 97 of the ITAA 1936. The Trustee will include in its calculation of net income, as defined in section 95 of the ITAA 1936, the total assessable income of the trust estate calculated under Division 6 of the ITAA 1936 as if the Trustee were a taxpayer in respect of that income less all allowable deductions. Under subsection 44(1) of the ITAA 1936, the assessable income of a resident shareholder in a company includes dividends that are paid to the shareholder by the company out of profits derived by it from any source. Therefore, to the extent that a dividend is received by the Trustee as a shareholder and included by the Trustee in its calculation of net income for the purposes of Division 6 of the ITAA 1936, the Employee proportionate share of the section 95 net income of the trust estate for the purposes of section 97 of the ITAA 1936 will be the proportionate share of the income of the trust estate to which the Employee is presently entitled in the relevant income year. Will the proceeds received by the Employee upon redemption of the Share Units constitute assessable income under section 6-5 of the ITAA 1997? No. The disposal of Share Units acquired by the Employee is a realisation of a capital asset and the disposal proceeds do not constitute income according to ordinary concepts assessable under section 6-5 of the ITAA 1997. Will the proceeds received by the Employee upon redemption of the Share Units constitute assessable income under section 15-2 of the ITAA 1997? No. The disposal of Share Units acquired by the Employee is a realisation of a capital asset and the disposal proceeds do not constitute allowances, gratuities, compensation, benefits, bonuses or premiums assessable under section 15-2 of the ITAA 1997. To the extent that any proceeds received on the redemption of the Share Units constitute assessable income for the Employee under the provisions of section 6-5 or section 15-2 of the ITAA 1997, will the net proceeds (i.e. gross proceeds less the cost of the Share Units) be assessable, rather than the gross proceeds? Yes. To the extent that any proceeds received on the redemption of the Share Units constitute assessable income for the Employee under section 6-5 of the ITAA 1997 or allowances, gratuities, compensation, benefits, bonuses or premiums assessable under section 15-2 of the ITAA 1997, the net proceeds (gross proceeds from the sale of the Share Units less the amount of the loan used to acquire the Share Units) will be included in the assessable income of the Employee. To the extent that the proceeds received on the redemption of the Share Units do not constitute assessable income under section 6-5 or section 15-2 of the ITAA 1997 for the Employee: (a) will the redemption of the Share Units constitute a CGT event as set out in Division 104 of the ITAA 1997? Yes. The redemption of Share Units by the Employee will represent a disposal of those Share Units and each disposal will constitute a CGT event C2 under section 104-25 of the ITAA 1997. (b) will the proceeds received by the Employee upon the redemption of the Share Units be taken into account in calculating the Employee's net capital gain under Division 102 of the ITAA 1997? Yes. The Employee's assessable income for an income year includes any net capital gain upon the Share Units redeemed during that income year (section 102-5 of the ITAA 1997). (c) will the CGT discount provisions in Division 115 of the ITAA 1997 apply where the Share Units were acquired at least one year before the CGT event? Yes. The capital gain will be a discount capital gain under Division 115 of the ITAA 1997 as the capital gain made by the Employee is as a result from a CGT event C2 happening to the Share Units held by the Employee for at least 12 months. To the extent that the proceeds from any given redemption of Share Units are included in assessable income under section 6-5 or section 15-2 of the ITAA 1997 and are taken into account in calculating a net capital gain, will the anti-overlap provisions of section 118-20 of the ITAA 1997 operate to reduce the capital gain by the amount included in assessable income or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997? Yes. Where the disposal of an asset gives rise to assessable income and a capital gain, the amount of the income is included in assessable income and the capital gain is reduced by that amount or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997. If the Share Units are redeemed at a time that coincides with the cessation of the Employee's employment, will the proceeds on redemption be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? No. The disposal of Share Units held by the Employee at a time that coincides with the cessation of the Employee's employment is a realisation of a capital asset. The proceeds received do not constitute ordinary income and are therefore not an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997. Will Bonus Share Units issued to the Employee out of the corpus of the trust and in relation to the Employee's holding of Share Units, constitute assessable income under section 6-5 of the ITAA 1997? No. The issue of the Bonus Share Units creates an entitlement or right to money by way of a bonus. As a mere entitlement or right to receive salary or wages or bonus income, the receipt of Bonus Share Units isn't a derivation of that income for the purposes of section 6-5 of the ITAA 1997. Will Bonus Share Units issued to the Employee out of the corpus of the trust and in relation to the Employee's holding of Share Units, constitute assessable income under section 15-2 of the ITAA 1997? No. The Bonus Share Units do not constitute allowances, gratuities, compensation, benefits, bonuses or premiums for the purposes of section 15-2 of the ITAA 1997. To the extent that the issue of the Bonus Share Units does not constitute assessable income under section 6-5 or section 15-2 of the ITAA 1997 for the Employee: (a) will the provisions of subsection 130-20(3) of the ITAA 1997 apply to deem the Bonus Share Units to have been acquired when the Share Units were acquired and will the cost base be apportioned over both the Share Units and the Bonus Share Units? No. A Bonus Share Unit is not a unit to which Division 130 of the ITAA 1997 applies because a unit in a unit trust must give the unit holder an equitable interest in the assets of the trust (see Charles v Federal Commissioner of Taxation (1954) 90 CLR 598). The Bonus Share Units entitle the Employee, as unit holder, to a cash payment only and do not confer any equitable interest in the Trust. (b) will the redemption of the Bonus Share Units constitute a CGT event as set out in section 104-5 of the ITAA 1997? No. The payment of the Redemption Distribution to the Employee upon redemption of the Bonus Share Units is considered to be made to the Employee as a reward for services provided by the Employee to the Employer. It is therefore a derivation of salary or wages or bonus income, and ordinary income for the purposes of section 6-5 of the ITAA 1997. (c) will the proceeds received by the Employee upon the redemption of the Bonus Share Units be taken into account in calculating the Employee's net capital gain under Division 102 of the ITAA 1997? No. The redemption of the Bonus Share Units does not constitute a CGT event for the purposes of Division 104 of the ITAA 1997. (d) will the CGT discount provisions in Division 115 of the ITAA 1997 apply to the capital gain made by the Employee in respect of that redemption of the Bonus Share Units where the Bonus Share Units were acquired at least 12 months before the CGT event? No. The redemption of the Bonus Share Units does not give rise to a capital gain under Division 102 of the ITAA 1997. If Bonus Share Units are issued to the Employee, and in relation to the Employee's holding of Share Units, at a time that coincides with the cessation of the Employee's employment, will the value of the Bonus Share Units be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? No. The issue of the Bonus Share Units merely creates an entitlement or right to money by way of a bonus. It therefore does not constitute an employment termination payment to the Employee when issued at a time that coincides with the cessation of the Employee's employment. Will the proceeds received by the Employee upon redemption of the Bonus Share Units issued and in relation to the Employee's holdings of Share Units constitute assessable income under section 6-5 of the ITAA 1997? Yes. The payment of the Redemption Distribution to the Employee upon redemption of the Bonus Share Units is considered to be made to the Employee as a reward for services provided by the Employee to the Employer. It is therefore a derivation of salary or wages or bonus income, and ordinary income for the purposes of section 6-5 of the ITAA 1997. An amount must be withheld from the payment of the Redemption Distribution by the Trustee in accordance with section 12-35 of Schedule 1 to the Taxation Administration Act 1953 (TAA). Will the proceeds received by the Employee upon redemption of the Bonus Share Units issued and in relation to the Employee's holdings of Share Units constitute assessable income under section 15-2 of the ITAA 1997? Yes, to the extent that the proceeds received by the Employee upon redemption of the Bonus Share Units is considered to be made to the Employee in respect of employment or services rendered by the Employee to the Employer. The payment of the Redemption Distribution to the Employee upon redemption of the Bonus Share Units is considered to be made to the Employee in respect of employment or services rendered by the Employee to the Employer. It therefore constitutes compensation, benefits or bonuses for the purposes of section 15-2 of the ITAA 1997. An amount must be withheld from the payment of the Redemption Distribution by the Trustee in accordance with section 12-35 of Schedule 1 to the TAA. To the extent that the proceeds from any given redemption of Bonus Share Units are included in assessable income under section 6-5 or section 15-2 of the ITAA 1997 and are taken into account in calculating a net capital gain, will the anti-overlap provisions of section 118-20 of the ITAA 1997 operate to reduce the capital gain by the amount included in assessable income or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997? Yes. To the extent that the proceeds from the redemption of Bonus Share Units give rise to assessable income and a capital gain, the amount of the income is included in assessable income and the capital gain is reduced by that amount or to zero in accordance with subsections 118-20(2) and 118-20(3) of the ITAA 1997. If Bonus Share Units are redeemed at a time that coincides with the cessation of the Employee's employment, will the proceeds on redemption be an employment termination payment under section 82-130 of Part 2-40 of the ITAA 1997? Decline to Rule. The Commissioner declines to rule on basis that there are no facts known, or asked by the application to be assumed, as to the circumstances that will be prevailing in relation to the cessation of the Employee's employment at the time the Share Units are redeemed. In the absence of those facts, or the making of assumptions regarding those matters, the Commissioner considers the correctness of the private ruling sought would depend on which assumptions were made about a future event and therefore declines to rule.) If the Trustee, pursuant to the relevant clause of the Trust Deed, decides to pay salary to the Employee on behalf of the Employer, will the amounts paid to the Employee (including any amounts of Pay As You Go instalments withheld) be included as assessable income of the Employee under section 6-5 of the ITAA 1997? Yes. Where the Trustee, pursuant to the relevant clause of the Trust Deed, pays amounts to the Employee on behalf of the Employer from repayments of a loan pursuant to the relevant clause of the Trust Deed as salary minus amounts withheld as Pay As You Go tax instalments, such amounts (including the amounts of Pay As You Go instalments withheld) will constitute income according to ordinary concepts assessable under section 6-5 of the ITAA 1997. If the Trustee, pursuant to the relevant clause of the Trust Deed, decides to provide rights to shares to the Employee at a full discount on behalf of the Employer, will the discounted rights provided to the Employee be included as assessable income of the Employee under section 83A-25 of the ITAA 1997? Yes. Under subsection 83A-25(1) of the ITAA 1997, and unless Subdivision 83A-C applies, any discount given in relation to an ESS interest acquired under an employee share scheme is included in your assessable income for the income year of its acquisition. An employee share scheme is defined in subsection 83A-10(2) of the ITAA 1997 to include a scheme under which ESS interests in a company are provided to employees of that company or a subsidiary of that company, in relation to the employees' employment. An ESS interest in a company is defined in subsection 83A-10(1) of the ITAA 1997 as a beneficial interest in a share in the company, or a right to acquire a beneficial interest in a share in the company. Where the Employee, as an employee of the Employer, is provided with rights to ordinary shares in the Employer (i.e. an ESS interest) pursuant to the relevant clause in relation to the Employee's employment at a discount, the discount provided to the Employee will be included as assessable income of the Employee under subsection 83A-25(1) of the ITAA 1997. Subdivision 83A-C of the ITAA 1997 will not apply to ESS interests acquired under the Plan. | Detailed Reasoning - Disclaimer: You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you (or to someone acting on your behalf). The Register of private binding rulings is a public record of private rulings issued by the Tax Office. The Register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies. The rulings in the Register have been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict Tax Office policy or decisions.

This notice must not be taken to imply anything about: | the binding nature of the private advice issued to the applicant | the correctness of other edited versions. | Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases. | Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Does Part IVA apply to this ruling?: Part IVA of the ITAA 1936 is a general anti-avoidance rule that can apply in certain circumstances if you or another taxpayer obtains a tax benefit in connection with an arrangement and it can be concluded that the arrangement, or any part of it, was entered into or carried out by any person for the dominant purpose of enabling a tax benefit to be obtained. If Part IVA applies the tax benefit can be cancelled, for example, by disallowing a deduction that was otherwise allowable. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies we will first need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website and enter 'part iva general' in the search box on the top right of the page, then select: Part IVA: the general anti-avoidance rule for income tax.