Dividend access shares have been used in the past to improve a private company's asset protection and flexibility, as well as for estate planning and succession planning purposes. In the latter regard, their use has allowed corporate value to be earmarked to benefit the next generation as well as incentivising key employees.
The release of Taxpayer Alert TA2012/4 flagged the ATO's interest in their use in particular circumstances and the subsequent release of Tax Determination TD 2013/D5 goes a step further to set out the Commissioner's view that they should be used sparingly, if at all. For advisors of private and closely held taxpayers, this is not necessarily a satisfactory outcome.
The purpose of this event was to allow practitioners who have used dividend access shares or are considering their use, to understand what the rules of the game are in the current climate.