ATO issues taxpayer alert over use of derivative instruments

Taxpayers that hold derivatives with respect to Australian equities, particularly total return swaps, should take note of the taxpayer alert, writes Damian Ryan.

The Australian Taxation Office (ATO) released on Friday 4 December its Taxpayer Alert TA 2020/5 in relation to structured arrangements that provide imputation benefits on shares, where economic exposure is offset through the use of derivative instruments. During the recent Streamlined Assurance Reviews of superannuation funds, and now managed funds, the ATO became aware of the common use of derivatives in combination with the holding of physical assets to obtain the desired exposure to under...

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Authors: Damian Ryan

Published Date: 07 December 2020