Australia drafts CGT tweak for deferred deals

News

The Australian Tax Office has issued a draft ruling on the taxation of deferred-purchase agreements (DPAs) that is likely to affect structured products that incorporate DPA.

While the ruling discounts DPAs from being classed as income tax, it deems that a capital gains tax (CGT) event would occur on delivery to the investor of the delivery assets. This means investors may be liable to pay tax on unrealised returns. Previously the delivery assets had to be sold before CGT was chargeable.

DPAs are u

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