The Tribunal’s decision in GYBW’s case
The Tribunal upheld the ATO’s amended assessments for the 2013 to 2015 years, finding that the dividends paid to the SMSF by B Holdings, and the associated franking credits, were not “consistent with an arm’s length dealing” and were therefore NALI under S.295-550(2).
The Tribunal did not accept the SMSF’s contention that S.295-550(2) is concerned only with the relative amount of the dividend paid on B Holdings shares held by the SMSF, compared to the number of dividends paid to T K Investments Pty Ltd (being the other shareholder in B Holdings). Such a proposition was not consistent with the decision in Darrelen v FCT [2010] FCAFC 35, a decision that supports the contention that S.295-550(2) is not limited to an inquiry about the circumstances surrounding the payment of the dividend in question, but can extend to an inquiry about the circumstances surrounding the acquisition of the shares on which the dividend was paid.