The Resource Negative control

Negative control

Negative control
Negative control
Equity investors in Australian infrastructure commonly seek protection of their investments by obtaining some certainty over the investment vehicle's governance and its operations, through entering agreements covering these areas. The Australian Taxation Office (ATO) has expressed the view that the protections employed by minority equity investors may confer on individual investors the control (negative control) of the vehicle and its operations. This article explores the ATO's views and considers whether an alternative view is open, one which would provide greater certainty, and which would not have an unreasonably adverse impact on infrastructure investment. The article considers the ATO's views on the concept of control in the context of the public trading trust regime, and the thin capitalisation regime. The authors then provide a deeper analysis, and conclude with a discussion of possible ways to undo or mitigate the uncertainty caused by the ATO's position
Citation source
In: Taxation in Australia. - Sydney. - Vol. 49 (2014),
  • Scott, H
  • Reid, J. (Jack)
Language note
  • investment
  • control
  • trust
  • thin capitalization
Negative control

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