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ARTICLE · 18 JANUARY 2016

Section 100A reimbursement agreements targeted by the ATO

Cooper Grace Ward
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The ATO argues that certain trust distributions actually fall within the scope of the reimbursement agreement provisions.

AustraliaTax
Fletch Heinemann
Fletch Heinemann
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The ATO has a renewed interest in reimbursement agreements, confirmed in its list of ' what attracts our attention' dated 27 October 2015. This follows the ATO's continued attention on reimbursement agreements set out in its guidance released in July 2014. However, this time around, the ATO is arguing that certain trust distributions, which may be construed as part of legitimate tax planning, actually fall within the scope of the reimbursement agreement provisions – with particularly harsh consequences.

What are reimbursement agreements?

In broad terms, a reimbursement agreement exists where:

  • a trust distribution is made to a specified beneficiary;
  • another person obtains the benefit of the distribution; and

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