Abstract:
The purpose of this article is to seek to identify trends which highlight the
essential elements in the taxation of financial arrangements. To this end, the article
reviews the existing taxation regime for financial instruments under Australian common
law, and also examines the recommendations emanating from the reviews of the
taxation of financial arrangements in Australia. The existing common law regime and
the statutory proposals are compared and contrasted to highlight the distinctions
between them. The article also has regard to accounting standards which may be of
relevance. Additionally, some overseas regimes are reviewed for the guidance they may
provide in relation to developing a model for taxing financial instruments.
From a consideration of these areas, the author seeks to discern developing trends in the
taxation of financial instruments which may inform legislative development in
Australia. While some trends can be identified from an examination of existing practice,
the reviews undertaken and overseas experience, it would appear that accounting
standards may not currently be able to provide guidance in the taxation treatment of
financial instruments.
