A number of recent cases have focused on the pivotal question of capital versus revenue. Even after so many years, the distinction between capital and revenue is still a critical issue of direct relevance to corporate taxpayers.
The Honourable Justice Pagone focused on recent key cases and their implications, and Gordon Thring of Deloitte addressed legislative amendments that change the impact of the capital revenue distinction on corporate groups.
Issues covered included:
- the tax consolidation provisions, including implications for ACA push down, the application of the single entity rule in grouping activities, the implications on a disposal of shares by a head company, and the application of certain specific tax consolidation CGT events where shares held are not "capital" assets
- the possible breadth of McNeil's case and its application to other examples, including the exempt portion of capital gains distributed by trusts
- the capital gains tax (CGT) provisions in relation to widely held entities, including recent ATO views in relation to the application of the provisions to listed investment companies and managed funds and the potential implications for other taxpayers
- the CGT provisions in relation to applying certain rollover provisions and exemptions included only under the CGT regime
- the importance of the "capital"? classification of expenditure when examining the blackhole expenditure provisions.