On 31 January 2017, the Australia Taxation Office issued a Taxpayer Alert (TA) 2017/1 on the re-characterization of income from trading businesses. From the description of the TA:
---
We are reviewing arrangements which attempt to fragment integrated trading businesses in order to re-characterize trading income into more favorably taxed passive income. Our concern arises where a single business is divided in a contrived way into separate businesses. The income that might be expected to be s…