Professional conduct in relation to taxation guidance

KEY POINTS

• Comparison of the alternatives when withdrawing cash reserves from a company.
• The targeted anti-avoidance rule should not apply because there is no liquidation.
• There is an exemption for a fundamental change in ownership in the transactions in securities legislation.
• The vendor is making a clear choice within the scope of the legislation.
• The purchaser is buying a company at arm’s length and paying tax on the transaction.
• The emphasis of PCRT is on behaviour and not outcomes.

Pete Miller’s article (‘Is this another wind-up?’) elicited much interest in the Taxation office and Pete and I had a long discussion about it afterwards. What follows is a summary of the main points of our conversation. We think that readers will be interested in our thoughts not only...