Stapled strucures integrity package: An attempt to redress the balance

Stapled structures have been used in Australia since the 1980’s but have been the focus of much more recent attention with the Australian Taxation Office publishing Taxpayer Alert 2017/1 in January 2017 and Treasury releasing its Consultation Paper regarding potential reforms in March of the same year. After such a flurry of activity, 12 months later, Treasury has announced the details of a proposed ‘Integrity Package’ focussed on stapled structures and designed to rebalance the tax concessions available to foreign and domestic players in property intensive investments.

It’s worth noting that property intensive investment has long been conducted using trust structures. One of the main reasons for doing so, other than the flexibility these offer, was to attract flow-through taxation. This results in investors being taxed according to their own profile rather than the tax being levied on the structure, at least for passive property investments. In terms of after-tax returns, this is