By Geoff Stein
The Commissioner recently issued Taxpayer Alert TA2012/4 dealing with dividend access shares.
Although the Commissioner only said that these arrangements have "features which concern us" and "the ATO is currently reviewing these arrangements", it appears that the ATO may look to invoke Part IVA general anti-avoidance provisions, even if the value shifting safe harbour rules would otherwise apply.
You may need to consider alternatives including:
- applying for a private ruling in relation to any proposed arrangement for the issue of dividend access shares;
- issuing class shares for below the value shifting threshold in a way that the arrangement falls outside the features described in the taxpayer alert;
- structuring companies with discretionary trust shareholders in relation to a special class of shares from date of incorporation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
