INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 7 - Private companies  

SECTION 105AB   ADDITIONAL PERIOD FOR DISTRIBUTION BY LIQUIDATOR  

105AB(1)   [Notification and request by liquidator]  

Where:

(a) the liquidator of a private company that is in the course of being wound up proposes to make a distribution of money or other property to shareholders of the company during the first 10 months of a year of income of the company;

(b) the distribution, if made, would, in whole or in part, be deemed by section 47 to be a dividend paid to the shareholders by the company out of profits derived by it; and

(c) the liquidator expects that there will be a distributable income in relation to the company in relation to the year of income;

the liquidator may, by writing signed by him, notify the Commissioner that he proposes to make the distribution and may request the Commissioner to determine a period that is, for the purposes of this section, to be an additional distribution period in relation to the company in relation to the year of income.

105AB(2)   [Commissioner may grant additional distribution period]  

Where:

(a) the liquidator of a private company notifies the Commissioner under subsection (1) that he proposes to make a distribution of money or other property to shareholders of the company and requests the Commissioner to determine a period that, for the purposes of this section, is to be an additional distribution period in relation to the company in relation to a year of income; and

(b) the Commissioner considers that it is reasonable to assume that, if the money or other property that the liquidator proposes to distribute were not to be distributed during the prescribed period in relation to the year of income, there would, apart from this section, be an undistributed amount in relation to the company in relation to the year of income;

the Commissioner may grant the request and determine that a period, being a period that ends before the commencement of the prescribed period in relation to the year of income, is, for the purposes of this section, an additional distribution period in relation to the company in relation to the year of income, or he may refuse to grant the request.

105AB(3)   [Matters to be considered by Commissioner]  

In deciding whether to grant or refuse a request made under subsection (1) by the liquidator of a company who has notified the Commissioner that he proposes to make a distribution of money or other property to shareholders of the company during the first 10 months of a year of income of the company, the Commissioner shall have regard to:

(a) whether, in the opinion of the Commissioner, the making of the proposed distribution before the expiration of that period of 10 months would expedite the winding up of the company;

(b) whether, apart from the operation of this Division (other than this section), it would be unreasonable for the liquidator not to make the proposed distribution before the commencement of the prescribed period in relation to the year of income;

(c) whether, in the opinion of the Commissioner, the distribution proposed to be made by the liquidator is to be made in the course of a transaction, operation, undertaking, scheme or arrangement that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that a person who, if the transaction, operation, undertaking, scheme or arrangement had not been entered into or carried out, would have been liable to pay income tax in respect of a year of income would not be liable to pay income tax in respect of that year of income or would be liable to pay less income tax in respect of that year of income than that person would have been liable to pay if the transaction, operation, undertaking, scheme or arrangement had not been entered into or carried out; and

(d) any other matters that he considers relevant.

105AB(4)   [Commissioner to notify decision]  

Where the Commissioner has made a decision to grant or to refuse a request made under subsection (1) by the liquidator of a company, he shall serve by post on the liquidator notice in writing of the decision and, in a case of a decision to grant such a request, the notice:

(a) shall specify the period that has been determined by the Commissioner to be an additional distribution period in relation to the company in relation to a year of income; and

(b) shall be served on the liquidator before the commencement of that additional distribution period.

105AB(5)   [Notification by liquidator at end of additional period]  

Where the Commissioner has granted a request made under subsection (1) by the liquidator of a company and has determined an additional distribution period in relation to the company in relation to a year of income, the liquidator shall, within 30 days after the end of that additional distribution period, or within such further time as the Commissioner allows, give a notice in writing to the Commissioner stating:

(a) whether any distribution of money or other property was made by the liquidator during that additional distribution period;

(b) if a distribution of money or other property was made, or distributions of money or other property were made, by the liquidator during that additional distribution period, the amount of that distribution or the amounts of those distributions, as the case may be; and

(c) if a distribution of property other than money was made, or distributions of property other than money were made, by the liquidator during that additional distribution period, the amount of that distribution of property or the amounts of those distributions of property, as the case may be, and the nature of the property that was distributed.

105AB(6)   [Sufficient distribution where additional period granted]  

Where, in pursuance of subsection (2), the Commissioner has determined that a period is to be an additional distribution period, or that periods are to be additional distribution periods, in relation to a company in relation to a year of income (in this subsection referred to as the relevant year of income ), so much of the dividend component of any distribution or of the sum of the dividend components of any distributions of money or other property made during that additional distribution period or those additional distribution periods by the liquidator of the company (being a distribution the amount of which was, or being distributions the amounts of which were, specified in a notice or notices given to the Commissioner by the liquidator in accordance with subsection (5)) as exceeds the amount (if any) that would be the undistributed amount in relation to the company in relation to the year of income immediately preceding the relevant year of income if no regard were had to the distribution or distributions of money or other property made by the liquidator during that additional distribution period or those additional distribution periods shall, for the purposes of ascertaining, for the purposes of this Division, whether the company is deemed to have made a sufficient distribution in relation to the relevant year of income, be taken to have been made during the prescribed period in relation to the relevant year of income.

105AB(7)   [Dividend component of distribution]  

For the purposes of subsection (6), the dividend component of a distribution made by the liquidator of a company is so much of the amount of the distribution as is deemed by section 47 to be a dividend or dividends paid by the company to shareholders out of profits derived by the company.

105AB(8)   [Exclusion from ``additional distribution period'']  

The reference in subsection (6) to a period that is an additional distribution period in relation to a company shall be read as not including a reference to a period that is, by reason of subsection (9) or (10), deemed to be an ineligible additional distribution period in relation to the company.

105AB(9)   [Ineligible distribution period]  

Where:

(a) the liquidator of a company has made a distribution or distributions of money or other property during a period that is an additional distribution period in relation to the company in relation to a year of income; and

(b) the Commissioner is satisfied that the distribution, or any of the distributions, as the case may be, arose out of, or was made in the course of, a transaction, operation, undertaking, scheme or arrangement that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that a person who, if the transaction, operation, undertaking, scheme or arrangement had not been entered into or carried out, would have been liable to pay income tax in respect of a year of income would not be liable to pay income tax in respect of that year of income or would be liable to pay less income tax in respect of that year of income than that person would have been liable to pay if the transaction, operation, undertaking, scheme or arrangement had not been entered into or carried out,

that additional distribution period shall, for the purposes of subsection (8), be deemed to be an ineligible distribution period.

105AB(10)   [Ineligible additional distribution period]  

Where:

(a) apart from this subsection, a distribution or distributions of money or other property made by the liquidator of a company during a period that is an additional distribution period in relation to the company in relation to a year of income would, for the purposes of ascertaining, for the purposes of this Division, whether the company is deemed to have made a sufficient distribution in relation to the year of income, be taken, by virtue of subsection (6), in whole or in part, to have been made during the prescribed period in relation to that year of income; and

(b) the company is not dissolved before the end of the period of 6 months, or such longer period as the Commissioner allows, after the end of that additional distribution period;

that additional distribution period shall, for the purposes of subsection (8), be deemed to be an ineligible additional distribution period.

105AB(11)   [Company dissolution]  

Where:

(a) the dissolution of a company occurs at any time; and

(b) by reason of the operation of any law or of an order of a court, the dissolution is void or the company is deemed to have continued in existence for any purpose after the time when the dissolution occurred;

that dissolution of the company shall be disregarded for the purposes of paragraph (10)(b).

105AB(12)   [ income tax ]  

In this section, income tax does not include additional tax payable under section 104 .