Foreign beneficiaries in the estate plan David Hughes, CTA and Paige Edwards, FTI
Published Date: 28 Feb 2025
This year marks the twentieth anniversary of the introduction of the “foreign hybrid” provisions in Div 830 of the Income Tax Assessment Act 1997 (Cth). The provisions have come to represent an important aspect of the Australian tax treatment of outbound investments involving foreign fiscally transparent entities. The provisions have a number of unique features and limitations, including the potential for different entity classification outcomes as between particular members. The notion that an entity’s classification might, like the state of Schrödinger’s imaginary cat in the box, be dependent on the perspective of particular “observer” taxpayers raises a question as to the extent of the partnership fiction under Div 830. There is limited guidance available in the explanatory memoranda or publicly accessible decisions of the Commissioner in relation to this or a number of other issues that have been identified with respect to the operation of Div 830 in practice.
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- Published By: John Fulton CTA
- Published On:28 Feb 2025
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