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Edited version of your written advice
Authorisation Number: 1012820927684
Date of advice: 26 June 2015
Ruling
Subject: Income tax
In order to protect the privacy and commercial in-confidence components of this private ruling, the following summary is provided.
The taxpayer is proposing amendments to an existing arrangement.
The Commissioner ruled that:
• A certain provision does not apply to the amended arrangement.
• The taxpayer was denied a deduction for payments made in relation to the proposed amendments under subsection 8-1(2) of the Income Tax Assessment Act 1997 (ITAA 1997).
• The payments form part of the fourth element of the cost base of the CGT asset (i.e., the taxpayer's bundle of rights under the arrangement) under paragraph 110-25(5)(a) of the ITAA 1997.
• Subsection 110-25(5A) of the ITAA 1997 does not apply to exclude the payments from the fourth element of the cost base of the CGT asset.
• The payments are capital expenditure in relation to the business of the taxpayer for the purposes of section 40-880 of the ITAA 1997.
• Paragraph 40-880(5)(f) of the ITAA 1997 applies to deny a deduction under subsection 40-880(2) of the ITAA 1997 for the payments.