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Edited version of your written advice
Authorisation Number: 1013023049920
Date of advice: 22 June 2016
Advice
Subject: Financial investment product
1. ATO advice was provided that from an investor's perspective, the financial product is considered to be:
• a 'CGT asset' for the purposes of Part 3-1 of the Income Tax Assessment Act 1997 (ITAA 1997) (capital gains tax provisions); and
• a 'financial arrangement' for the purposes of Division 230 of the ITAA 1997 (taxation of financial arrangements or TOFA).
2. ATO advice was provided that from an investor's perspective:
• a taxing point will not arise under section 6-5 of the ITAA 1997, section 8-1 of the ITAA 1997, the CGT provisions in Part 3-1 of the ITAA 1997, and Division 230 of the ITAA 1997 upon particular events happening to the financial product (events not disclosed in this edited version due to commercial in-confidence).
• the anti-avoidance provisions contained in Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936) will not apply to an investor in respect of the financial product, in the specified scheme (details of which are not disclosed in this edited version due to commercial in-confidence).
Relevant facts and circumstances
The ATO received an application for a ruling about the application of certain income tax provisions to investors who invest in a certain financial product. It is envisaged that the following type of Australian investors may participate in the financial product: trusts, superannuation funds and individuals. All of the rights and obligations under the financial product relate solely to the receipt or provision of money.
The ATO provided a ruling as summarised above.
Details of the financial product are not disclosed here as they are commercial in-confidence.