What is a ‘restructuring’ for demerger relief?

The ATO takes an exceedingly broad definition of “restructuring”, under which the demerger occurs, write Len Nicita and Shirley Lam.

The Australian Taxation Office (ATO) has just finalised Tax Determination TD 2020/6 regarding what constitutes a “restructuring” for the purposes of obtaining relief from tax for a demerger group and its shareholders.The determination builds upon its draft issued in 2019 and provides additional guidance, appearing to attempt to better align with commercial issues that can arise as part of undertaking any planned demerger transaction.However it continues to remain the case that the ATO takes a...

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Authors: Len Nicita, Shirley Lam

Published Date: 06 August 2020