Dividend stripping schemes: Towards a broader judicial interpretation

Publisher:
Lawbook Co
Publication Type:
Journal Article
Citation:
Australian Tax Review, 2010, 39 (3), pp. 139 - 151
Issue Date:
2010-01
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At issue before the Full Federal Court in Lawrence v FCT was the scope of the operation of s 177E(1) of the Income Tax Assessment Act 1936 (Cth), dealing with schemes by way of or in the nature of dividend stripping, or schemes having the effect of a scheme by way of or in the nature of a dividend stripping. While the taxpayer relied on High Court comments in FCT v Consolidated Press Holdings as limiting the ambit of schemes having the effect of dividend stripping, the Full Federal Court in Lawrence declined to adopt such an interpretation, finding instead that the High Courts comments were merely illustrative of such schemes. This decision arguably adopts a potentially much broader interpretation of s 177E in identifying schemes having the effect of a dividend stripping scheme.
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