‘Earn-out arrangements’ – ATO releases Discussion Paper on the tax treatment of rights that don’t qualify for the ‘look through’ approach provided for under Subdiv 118-I
On Monday 3.12.18, the ATO issued a Discussion Paper for comment on Issues concerning earnout arrangements (excluding arrangements that create look-through earnout rights). ‘Earn-out’ arrangements usually involve the grant of a right (or multiple rights) to one or more future payments which are contingent on future events in connection with the business. The quantum of…