Taxation Ruling TR 2014/6 gives guidance on identifying situations where the form of commercial or financial relations differs from the substance and confirms the ATO’s power to disregard and reconstruct transactions that lack economic substance. The examples given in TR 2014/6 where reconstruction could arise include marketing hubs, transfers of intangibles and loss-making companies. The reconstruction provisions are contained in section 815-130 ITAA 1997.
Intangible property: TR 2014/6 also clarifies the situations where the tax authorities could reconstruct transactions whose form is not in line with their commercial substance and includes transfers of intangible assets as an example of one situation where this could occur.
