Purpose in Consolidation: No More Purpose?

Australian Tax Review, p. 253, 2007

U of Melbourne Legal Studies Research Paper No. 327

16 Pages Posted: 29 Apr 2008

See all articles by Sunita Jogarajan

Sunita Jogarajan

University of Melbourne - Law School

Date Written: 2007

Abstract

This article argues that the current test of purpose used to characterise a gain or loss on disposal of an asset as being on captial or revenue account is inappropriate in a tax consolidated environment. The article focuses on the sale of shares in a subsidiary member of a consolidated group and argues that the test should be abolished in this context. It suggests that all such dispoals should be treated as being on capital account to provide taxpayers with certainty and to achieve the policy objectives of the tax consolidation regime.

Keywords: tax, purpose, gain, loss, disposal, asset, Australia

JEL Classification: K34

Suggested Citation

Jogarajan, Sunita, Purpose in Consolidation: No More Purpose? (2007). ; U of Melbourne Legal Studies Research Paper No. 327. Available at SSRN: https://ssrn.com/abstract=1126590

Sunita Jogarajan (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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