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ARTICLE · 20 JANUARY 2014

AAT case gives insight into control considerations for SMSFs and structures involving related parties

Cooper Grace Ward
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A recent case provides some valuable insights into when a person may be deemed to 'control' an entity.

AustraliaFinance and Banking
Scott Hay-Bartlem
Scott Hay-Bartlem
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Gutteridge and Commissioner of Taxation [2013] AATA 947 provides some valuable insights into when a person may be deemed to 'control' an entity, even if the person is not a director or shareholder of the entity. While the case was concerned with 'control' in the context of small business CGT concessions, self-managed superannuation fund (SMSF) trustees and their advisers should take particular note, as the factors considered in Gutteridge could easily apply in an SMSF context.

For SMSFs, if a related party 'controls' another entity and the SMSF invests in that entity, the investment by the SMSF may cause significant compliance issues (in-house assets) for the SMSF. Determining 'control' involves a detailed analysis of the structures, the people involved and their relationships, and the related party rules often connect people who are seemingly unrelated.

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