Third-party debt test and restructures in response to the thin capitalisation changes – New ATO draft guidance

Taxpayers that are considering undertaking restructures or refinances in relation to debt, should review the guidance against their own circumstances to identify the risk that the ATO will seek to apply the anti-avoidance provisions, as outlined by Stephen Carpenter, Katrina Piva, Josh Cardwell, Matt Ervin and Amanda Maguire.

The Australia Taxation Office (ATO), on 4 December 2024, released new draft guidance on the third-party debt test (TPDT), Draft Taxation Ruling TR 2024/D3 (TR 2024/D3). Additional draft guidance was also released on 4 December 2024, being Schedules 3 and 4 of the ATO's draft guidance on its compliance approach for restructures and the thin capitalisation and debt deduction creation rules (DDCR), Draft Practical Compliance Guideline PCG 2024/D3 (PCG 2024/D3). These follow the issuance of Sched...

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Authors: Stephen Carpenter, Katrina Piva,

Published Date: 09 December 2024