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  • TA 2020/4: Multiple entry consolidated groups avoiding CGT

    We've issued a new Taxpayer Alert TA 2020/4 regarding arrangements attempting to reduce or avoid capital gains tax (CGT) on the disposal of a certain assets of a group by way of an internal restructuring using the MEC group rules followed by an ET-1 company leaving the MEC group.

    We've issued this in addition to TA 2019/1 Multiple entry consolidated (MEC) groups avoiding CGT through intra-group debt because we have found further arrangements involving the uses of MEC groups to, in effect, reduce or avoid CGT.

    Our primary concern is that some arrangements may be unnecessarily complex or involve commercially unnecessary steps to restructure Australian assets within a MEC group in anticipation of a divestment of assets in a way which reduces or avoids CGT.

    What you need to do

    If you have entered, or are contemplating entering, into an arrangement of this type:

    • read Taxpayer Alert TA 2020/4 Multiple entry consolidated groups avoiding capital gains tax through the transfer of assets to an eligible tier-1 company prior to divestment
    • contact us immediately at PGIInternationalRiskProjects@ato.gov.au and notify us of arrangements in your reportable tax position (RTP) schedule.

    See also:

    Last modified: 25 Aug 2020QC 63466