INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision D - Dividends  

SECTION 45C   EFFECT OF DETERMINATIONS UNDER SECTIONS 45A AND 45B FOR CAPITAL BENEFITS  

45C(1)  


If the Commissioner makes a determination under subsection 45A(2) or 45B(3) , the amount of the capital benefit, or the part of the benefit, is taken, for the purposes of this Act, to be an unfranked dividend that is paid by the company to the shareholder or relevant taxpayer at the time that the shareholder or relevant taxpayer is provided with the capital benefit.

45C(2)  
The dividend is taken to have been paid out of profits of the company.

45C(3)  
If the Commissioner has made a determination under section 45B in respect of the whole or a part of a capital benefit and the Commissioner makes a further written determination that the capital benefit, or the part of the capital benefit, was paid under a scheme for which a purpose, other than an incidental purpose, was to avoid franking debits arising in relation to the distribution from the company:


(a) on the day on which notice of the determination is served in writing on the company, a franking debit of the company arises in respect of the capital benefit; and


(b) the amount of the franking debit is the amount that, if the company had:


(i) paid a dividend of an amount equal to the amount of the capital benefit, or the part of the capital benefit, at the time when it was provided; and

(ii) fully franked the dividend;
would have been the amount of the franking credit of the company that would have arisen as a result of the dividend.

45C(4)  


The amount of the capital benefit is:


(a) if the benefit is the provision of an ownership interest - the market value of the interest at the time that it is provided; or


(b) if the benefit is an increase in the market value of an ownership interest - the increase in the market value of the interest as a result of the change; or


(c) if the benefit is a distribution to the shareholder of share capital or share premium - the amount debited to the share capital account or share premium account of the company in connection with the provision of the benefit.

45C(4A)  


For the purposes of this section:


(a) a non-share distribution to an equity holder is taken to be the distribution to the equity holder of share capital to the extent to which it is a non-share capital return; and


(b) the debit to the company's non-share capital account, in respect of the non-share distribution, is taken to be a debit to the company's share capital account.

45C(5)  
(Repealed by No 41 of 2011)

45C(6)  
(Repealed by No 41 of 2011)


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