Land impairment

We issued Taxpayer Alert TA 2008/11 Land Impairment Trust Arrangement on 6 June 2008. Taxpayer alerts are an 'early warning' to taxpayers and their advisers of significant tax planning issues or arrangements that we have concerns about or have under risk assessment.

The alert describes land impairment trust arrangements associated with managed investment schemes. These arrangements involve the sale of land at an impaired value by a member of a group of entities that are treated as a consolidated group for income tax purposes.

Oversize partnerships

Some applications have raised issues about whether the subject scheme would result in an oversize common law partnership, which is prohibited by section 115 of the Corporations Act 2001.

Our position is that we will not rule on arrangements which are prohibited by law.