Thin capitalisation: A focus on trusts
Source: The Tax Specialist Journal Article
Published Date: 1 Oct 2016
Unit trusts are the investment vehicle of choice for many investors involved in infrastructure projects. The two key features of infrastructure transactions that especially require careful consideration involve deductibility of interest assumptions and assumptions in relation to the tax transparency of vehicles. There are many tax issues which are critical to availability of debt deductions to trust vehicles holding infrastructure projects, including unit trusts. This article looks at the thin capitalisation rules, with a particular focus on domestic infrastructure projects in which eligible investment business activities are conducted within a unit trust. The article examines the thin capitalisation rules, as amended in 2014, in the light of changes to the worldwide gearing test, the Australian Taxation Office's compliance position in respect of negative control and changes to the definition of public unit trust. The article discusses the exemption for the 90% Australian assets test and the exemption for special purpose entities.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Angela Van, Steve Ford CTA
- Published On:1 Oct 2016
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page