The recent case of FCT v Hacon illustrates the practical difficulties in obtaining a private ruling that depends on assumptions about future events - in particular, in the context of the application of Part IVA.
The Full Federal Court in Hacon upheld the Commissioner’s appeal against the decision of Logan J at first instance.
The Full Federal Court held that the Commissioner's decision to decline to issue a private ruling in respect of the application of Part IVA to a proposed transaction was a valid decision. Section 357-110(1)(a) of Schedule 1 of the Taxation Administration Act 1953 (TAA) gives the Commissioner a discretion to decline to make a ruling if the Commissioner considers that the correctness of the ruling would depend on assumptions about a future event.
The Full Federal Court in Hacon distinguished between making a decision on facts outlined in a private binding ruling that depends on an assumption about a future event and those ruling requests where, if the Commissioner considers that further information is required to make a ruling, under section 357-105 of Schedule 1 of the TAA the Commissioner must request the information.
The Full Federal Court also noted the comments by Hill J in Bellinz v FCT (1998) 84 FCR 154 of the practical difficulties the Commissioner will face in some cases in giving a private ruling as to whether Part IVA applies to an arrangement.
Sladen Legal’s tax practice is highly experienced in preparing and applying for private rulings, including those relating to Part IVA.
To discuss this further or for more information please contact: