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It’s time for certainty on the debt front
Published on 01 Oct 14 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The equity override rule in s 974-80, which is part of the debt/equity rules contained in Div 974 of the Income Tax Assessment Act 1997 (Cth), is clearly in need of reform in order to provide taxpayers and the ATO with the certainty, coherence and simplicity once promised by the debt/equity rules. Some current developments, including a review by the Board of Taxation, have given hope that that reform will be achieved. This article sets out the background of s 974-80, its uncertain purpose, scope and application (including some particular areas of uncertainty), and then provides some context to the need for reform, including consideration of the ATO’s administration of the provision.
The article has particular regard to the section’s application to the infrastructure industry, where the uncertainty created by s 974-80 has affected listed entities and future investment structures.
Author profiles
Stuart Landsberg
Stuart Landsberg is an international tax partner with over 19 years of experience advising clients on a range of issues relating to their cross-border investments and holdings. He has recently returned to Australia after a five year assignment to PwC US, where he led PwC's Australian Tax Desk and where he counselled US and Australian taxpayers in respect of their investments in the respective countries. Notwithstanding his specialisation in international tax, Stuart has a broad-based practice with a deep specialisation in the taxation of M&A and assisting clients to favourably resolve tax controversies too. He has a similarly broad-based industry focus, starting his career with a focus on energy and resources, but more recently advising clients in the technology sector and also advising financial sponsors and alternative asset managers in relation to their investments across the economy. - Current at 03 June 2025
Chris McLean
Chris is a Partner at PricewaterhouseCoopers.Current at 1 August 2014
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