This Draft Determination, issued on Wed 15.1.2014, states that the application of Pt IVA of the ITAA 1936 to any particular scheme depends on a careful weighing of all the relevant facts and surrounding circumstances of each case. It states that without all relevant information, it is not possible to state definitively whether a provision in Pt IVA applies to a particular scheme.
However, according to the Draft, the Commissioner’s view is that s 177EA will generally apply to a “dividend washing” scheme as described in the example contained in the Draft. The example broadly concerns the sale of one parcel of shares on an ex-dividend basis by an SMSF which is later brought back as a second parcel on a “special market” with the dividend attached. This, the Draft states allows the SMSF to access additional franking credits.
DATE OF EFFECT: When the final Determination is issued, it is proposed to apply both before and after its date of issue.
COMMENTS are due by 14 February 2014. ATO contact: Maria Noia – Tel: (03) 9945 5844; Fax: 1300 300 591; Email: Maria.Noia@ato.gov.au.
[LTN 9, 15/1/14]