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How product rulings apply

Learn about the terms of use of a product ruling, which sets out our opinion on tax treatment of a specific arrangement.

Last updated 2 August 2017

A product ruling is not a precedent. It sets out our opinion about the tax treatment applying to the specified arrangement. We are bound by law to the rulings we give, unless the arrangement actually carried out is materially different to the arrangement ruled on.

The introduction of other arrangements, or additional features such as financing, to an arrangement that has been ruled on may lead to a conclusion that a material difference exists. This will happen if the change produces a different tax outcome. If this occurs, we may take action to clarify the consequences.

Terms of use

Product rulings are made on the basis that the applicant, and their associates, will abide by an agreement on terms of use.

Before a ruling is issued we'll issue a draft and ask the applicant to confirm that the arrangement described is correct and complete. Any failure to comply with the terms of use may lead to the withdrawal of the ruling.

See also  

Product rulings usually apply prospectively

Product rulings usually have prospective effect only – that is, they usually apply only to arrangements beginning on or after the date the ruling is made. This means that participants are not covered by a ruling if they enter into the arrangement before the ruling is made.

Product rulings that cover financial products may apply before the date that the ruling is issued. Where this is the case, the ruling will clearly state that it applies before the date of issue.

A ruling doesn't imply ATO endorsement

We don't sanction or guarantee any product as an investment. Further, we give no assurance that the product is commercially viable, that charges are reasonable, appropriate or represent industry norms, or that projected returns will be achieved or are reasonably based.

Potential participants must form their own view about the commercial and financial viability of a product. They need to consider issues such as whether the projected returns are realistic, the 'track record' of the management, the level of fees compared with similar products, and how the investment fits an existing portfolio. We recommend you consult a financial (or other) adviser for this information.

Changes to product rulings

We may change a product ruling after it has been issued if the arrangement changes. We do this by issuing an Addendum or a Withdrawal notice to the initial product ruling to explain what the changes mean for participants.

To view a change to a product ruling:

  • access the current version of the product ruling from our legal database
  • a product ruling that has been withdrawn will be signified by a 'W' following the product ruling number
  • view the history section in the product ruling to identify all changes
  • use the links in the history to view a specific change.