Sladen Snippet - ATO update to the AXA Part IVA Decision Impact Statement and PS LA 2005/24

The ATO has recently updated its Decision Impact Statement on FCT v AXA Asia Pacific Holdings Ltd 2010 ATC 20-224 to include amendments made in September 2016 to PS LA 2005/24 (which discusses the administration of the general anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936).

Of particular relevance are the following statements included in the updated Decision Impact Statement (and discussed in PS LA 2005/24) to reflect statements made by the Full Federal Court in AXA:

1. that “the Commissioner may need to consider issuing multiple assessments on different taxpayers under different alternative postulates”; and

2. section 177CB (which applies to schemes entered into on or after 16 November 2012) significantly alters the “tax benefit” test in section 177C(1) such that earlier case law discussing this concept “can no longer be wholly regarded as representing the law after 16 November 2012, and should be treated with extreme caution.”

Taxpayers and their advisers should consider the implications of these statements when examining Part IVA.

To discuss this further or for more information please contact:

Renuka Somers
Special Counsel
Sladen Legal
M +61 407 478 592|  T +61 3 9611 0110

Daniel Smedley
Principal | Accredited Specialist in Tax Law
Sladen Legal
M +61 411 319 327|  T +61 3 9611 0105

Patricia Martins
Legal Executive / Project Manager
Sladen Legal
T +61 3 9611 0138