A product ruling sets out the tax consequences of an arrangement for investors. This gives certainty about the tax benefits legally available if the arrangement is implemented exactly as outlined in the ruling.
A product ruling is not a guarantee of the commercial or financial viability of the product.
Promoters of tax-effective arrangements may apply for a product ruling in relation to an investment product they intend to offer to a number of participants. These participants will enter into substantially the same contractual arrangements and transactions with a common entity or a common group of entities, in return for fees or other consideration.
When you're considering a tax-effective arrangement you should check if a product ruling has been issued for it. If it has and you implement the arrangement exactly as described, you can be certain of the tax consequences.
It's important to make sure the product ruling is valid. It must be current and also needs to apply to that particular arrangement, in that particular year. If there is a financing or loan element of the product you're considering, then it should be described in the product ruling. You are not covered by product rulings for similar arrangements – the ruling must apply to the exact arrangement you are considering.
If the arrangement you are considering does not have a product ruling you may apply for a private ruling.
Product rulings set out the tax consequences of an arrangement for investors. This gives certainty about the tax benefits legally available if the arrangement is implemented exactly as outlined in the ruling.