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This edited version will be removed from the Database after 30 September 2025. If you believe the issues detailed in this edited version warrant retention in an alternative form, email publicguidance@ato.gov.au

This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of private ruling

Authorisation Number: 1011591832746

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Deduction under subsection 320-310(1) of the ITAA 1997

Question

Does the phrase 'pays an amount' in subsection 320-310(1) of the Income Tax Assessment Act 1997 (ITAA 1997) include the transfer of cash and other property (being traditional securities)?

Answer

Yes.

This ruling applies for the following period:

30 June 2011

Relevant facts and circumstances

Company A is:

§ a company limited by shares and guarantee registered under the Corporations Act 2001 (Cth);

§ a jointly regulated friendly society registered under the Life Insurance Act 1995 (Cth) (the Life Act) and consists of a number of friendly society benefit funds (the Life Insurance Business);

§ the Life Insurance Business consists of a number of Funds

Company B will be a regulated body of the same kind as Company A (that is, registered under the Life Act).

Company A intends to transfer the Life Insurance Business to Company B by implementing a voluntary, partial transfer of business under the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) (FSBT Act) (referred to as the Transaction).

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 320-310(1)

Income Tax Assessment Act 1997 Paragraph 320-15(1)(h)

Part 9 of the Life Insurance Act 1995

Section 18 of the Financial Sector (Business Transfer and Group Restructure) Act 1999

Does Part IVA apply to this ruling?

Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936) is a general anti-avoidance rule that can apply in certain circumstances if you or another taxpayer obtains a tax benefit in connection with an arrangement and it can be concluded that the arrangement, or any part of it, was entered into or carried out by any person for the dominant purpose of enabling a tax benefit to be obtained. If Part IVA applies the tax benefit can be cancelled, for example, by disallowing a deduction that was otherwise allowable.

We have not fully considered the application of Part IVA of the ITAA 1936 to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part.

If you want us to rule on whether Part IVA of the ITAA 1936 applies we will first need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply.

For more information on Part IVA of the ITAA 1936, go to our website www.ato.gov.au and enter 'part iva general' in the search box on the top right of the page, then select: Part IVA: the general anti-avoidance rule for income tax.

Reasons for decision

These reasons for decision accompany the Notice of private ruling for Company A.

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

Question 1

Does the phrase 'pays an amount' in subsection 320-310(1) of the ITAA 1997 include the transfer of cash and other property?

Yes.

Detailed reasoning

The phrase 'pays an amount' in subsection 320-310(1) of the ITAA 1997 includes the transfer of cash and other property (being traditional securities) based on the following reasons:

§ ordinary definition;

§ policy intent as evinced in the Explanatory Memorandum;

§ judicial consideration of the term 'paid';

§ to avoid inappropriate and distortionary tax outcomes

The reason for the brevity of the edited version of the private ruling is to avoid disclosing the identity of the taxpayer(s).

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