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Section 974-80 ITAA97: The current state of play

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Published on 01 Jun 16 by "THE TAX SPECIALIST" JOURNAL ARTICLE

Section 974-80, which is part of the debt and equity rules in Div 974 of the Income Tax Assessment Act 1997, is described as an integrity or anti-avoidance measure. Few sections of the Act have created as much consternation as this section. From a seemingly innocuous beginning, s 974-80 morphed from a tightly focused avoidance provision into one with the scope and strength to force the restructure of publicly listed groups.

This article provides an overview of the history of s 974-80, including the latest proposal for amendment, describes how the section was used to attack and largely annihilate certain financing structures, and demonstrates the current complexities facing certain stapled groups by stepping through various arguments for and against the operation of s 974-80 to cross-staple loans. The article concludes by looking at the current landscape and the role that the section may continue to play in the foreseeable future.

Author profile

Richard Buchanan CTA
"Richard Buchanan CTA, is a partner in the M&A Tax team at Deloitte who specialises in the tax aspects of major infrastructure, real estate, private equity and corporate transactions. In these transactions, Richard leads teams that conduct due diligence, structuring, transaction document drafting and negotiation, liaison with regulatory authorities, model review and post-acquisition integration steps. Richard is also involved in a number of revenue authority engagements, including settlement negotiations, management of audits and risk reviews and private ruling negotiations. Richard first became a partner in 2005 at Deloitte (after beginning his career at Deloitte through university under the Deloitte cadet program). Richard was then approached to join Greenwoods & Herbert Smith Freehills (G&HSF) and was a partner at G&HSF for approx. 10 years until he was approached to join EY in 2016 (at which time Richard was the leader of the Melbourne office of G&HSF). In his time at a law firm, Richard was consistently recognised as one of Australia’s leading tax lawyers in external awards such as Chambers, Asia Pacific 500, Boyle’s and Legal Who’s Who. Richard rejoined Deloitte in December 2023 in the M&A Tax team. Richard is both a chartered accountant and a solicitor of the Supreme Court of Victoria. Richard is a fellow of the Taxation Institute of Australia and a member of the Law Institute of Victoria. Richard has an honours Commerce/ Law degree from Monash. Richard is a regular presenter at Tax Institute conferences, including the Financial Services Conference, the Victorian Tax Conference and the Infrastructure Conference on multiple occasions." - Current at 16 March 2026
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