Private ruling: Section 177E of the Income Tax Assessment Act 1936
Published: February 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Have you obtained a tax benefit in connection with a scheme to which section 177E of the Income Tax Assessment Act 1936 (ITAA 1936) applies in each of the Relevant Income Years (defined below)? | A1: No


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 177E

Reasons for decision: Summary: Part IVA of the ITAA 1936 is a general anti-avoidance provision that can apply in certain circumstances. Part IVA gives the Commissioner the power to cancel a 'tax benefit' (or part of a 'tax benefit') that has been obtained, or would, but for section 177F of the ITAA 1936, be obtained, by a taxpayer in connection with a scheme to which Part IVA applies. Part IVA of the ITAA 1936 contains a provision (section 177E) which is specifically directed at "dividend stripping" schemes. The preconditions for the operation of section 177E of the ITAA 1936 are set out in paragraphs (a) to (d). Where these conditions are satisfied, the scheme is to be taken to be a scheme to which Pt IVA applies. In your case, when considered in conjunction with the factors in section 177E(1) of the ITAA 1936, all these factors either point against the application of Part IVA or are neutral. Therefore, Part IVA will not apply to this arrangement.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: The taxpayer has provided a set of facts and wishes to know whether Section 177E of the ITAA 1936 applies.