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This edited version has been archived due to the length of time since original publication.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.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012606619969

Ruling

Subject: Division 250 of the Income Tax Assessment Act 1997

The ruling concerned the following:

    1. Will the 'assets' of the entity be put to a tax preferred use under section 250-60 of the Income Tax Assessment Act 1997 (ITAA 1997) if neither the entity, nor any of its connected entities, are a tax preferred entity?

    2. If the entity, or any of its connected entities, is a tax preferred entity and the 'assets' are put to a tax preferred use, is paragraph 250-15(c) of the ITAA 1997 satisfied when the financial benefits are received by the entity?

    3. If the answer to question 2 is affirmative, and assuming that Division 250 of the ITAA 1997 would otherwise apply to the entity and its 'assets', will the Commissioner make a determination under section 250-45 of the ITAA 1997 that Division 250 will not apply where the financial benefits are provided by:

    • a tax preferred end user (or a connected entity)

    • any tax preferred entity (or a connected entity), or

    • any entity that is a foreign resident?

The Commissioner ruled that:

    1. No. The 'assets' of the entity will not be put to a tax preferred use under section 250-60 of the ITAA 1997 if neither the entity, nor any of its connected entities, are a tax preferred entity.

    2. Yes. If the entity, or any of its connected entities, is a tax preferred entity and the 'assets' are put to a tax preferred use, paragraph 250-15(c) of the ITAA 1997 is satisfied when the financial benefits are received by the entity.

    3. Yes. Given that the answer to question 2 is affirmative, and assuming that Division 250 of the ITAA 1997 would otherwise apply to the entity and its 'assets', the Commissioner will make a determination under section 250-45 of the ITAA 1997 that Division 250 will not apply where the financial benefits are provided by:

    • a tax preferred end user (or a connected entity)

    • any tax preferred entity (or a connected entity), or

    • any entity that is a foreign resident.


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