What were they thinking: clarifying the policy

There is a defect in the way that cost base rules in section 128-50 of the ITAA 1997 apply where a dwelling that was the main residence of a joint tenant passes by survivorship to the other joint tenant(s).

There is a defect in the way that the main residence exemption applies where ownership of a dwelling has passed through a number of deceased estates.

Some of the most complicated deceased estate cases occur where a dwelling passes through several persons each of whom dies before a sale is made. The complexity arises because if a partial exemption is being determined, then it may not be appropriate to consider the use of the dwelling during just the last period of ownership of the deceased.

The anti hybrid rules broadly apply to payments between related entities. For most mismatches, whether entities are related is worked out by reference to their participation interest in section 350 of the 1936 Act but excluding any rights to vote or participate in decision-making (section 832-205). However, such rights are not excluded for the purpose of determining participation interest (and therefore whether the parties are related) for the financial instrument mismatch (section 832-200(4)). What is the rationale for the different approach?