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Edited version of private advice
Authorisation Number: 1052087248813
Date of advice: 17 February 2023
Ruling
Subject: Affiliate relationship
Question 1
Is Person A considered to be an affiliate of yours under section 328-130 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. Person A is considered to be an affiliate of yours under section 328-130 of the ITAA 1997. On the basis of your close family relationship, the business dependency on the use of the Property, the lack of formal arrangements in regard to the use of the Property and the relevant consultation around business decisions, it was reasonably expected that Person A would act in accordance with your wishes, in relation to their business affairs.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You acquired a 50% ownership in the Property in 20XX.
A family member acquired their 50% ownership in the Property in 19XX.
A family member carries on a primary production business on the Property.
There is no formal agreement between you and your family member, and you do not receive any rent for the use of your share of the Property.
You are involved in significant decisions in relation to the farm assets on the Property.
Your family member's aggregated turnover is less than $X million in the 20XX and 20XX financial years.
The Property was sold in the 20XX-XX financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 328-130