Income Tax Assessment Act 1936
(Repealed by No 101 of 2006)
View history note
Hide history noteS 46E repealed by No 101 of 2006, s 3 and Sch 3 item 6, effective 1 January 2008. S 46E formerly read:
arrangement
SECTION 46E DIVIDENDS PAID OUT OF PROFITS ARISING FROM THE RE-VALUATION OF CERTAIN ASSETS
46E(1)
In this section:
means:
(a)
any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b)
any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
asset re-valuation dividend
means a dividend paid to a shareholder at a particular time after 4 June 1987 in respect of a share in a company that was a re-valued asset-holding company as at that time (whether the company was a resident or a non-resident as at that time), to the extent to which the dividend was paid by the company out of profits arising from an eligible re-valuation of an asset.
net worth
, in relation to a company, means the total value of the assets of the company as reduced by the total liabilities of the company.
46E(2)
For the purposes of the application of the definition of asset re-valuation dividend in subsection (1) to a dividend paid to a shareholder at a particular time (in this subsection called the payment time ) in respect of a share in a company (in this subsection called the asset-holding company ):
(a) a re-valuation of an asset of the asset-holding company shall be taken to have been an eligible re-valuation if, and only if:
(i) at a particular time (in this subsection called the ``disposal time'' ), the shareholder or any other person disposed of:
(A) the share;
(B) another share in the asset-holding company;
(C) a share in a company other than the asset-holding company, being a company that was related to the asset-holding company immediately before the disposal time; or
(D) a beneficial interest in a trust estate that was related to the asset-holding company immediately before the disposal time;
(ii) any of the following sub-subparagraphs apply:
(A) the disposal time was after the time of the re-valuation of the asset;
(B) the re-valuation of the asset occurred at the disposal time;
(C) the disposal time was before the time of the re-valuation of the asset and the asset was re-valued under or as the result of an arrangement entered into at or before the disposal time;
(iii) if sub-subparagraph (ii)(A) applies - the asset-holding company did not dispose of the asset at or before the disposal time;
(iv) if sub-subparagraph (ii)(C) applies - the asset-holding company owned the asset at the disposal time and continued to own the asset until the re-valuation of the asset; and
(v) had the asset-holding company disposed of the asset at the disposal time, either of the following sub-subparagraphs would have applied:
(A) any profit that would have arisen on the disposal of the asset would, in whole or in part, have been included in the assessable income of the asset-holding company or any loss that would have arisen from the disposal of the asset would, in whole or in part, have been allowable as a deduction to the asset-holding company;
(B) the asset-holding company acquired the asset on or after 20 September 1985, the disposal would have been a CGT event, and a capital gain or capital loss arising from the event would not have had to be disregarded (apart from a roll-over under Division 122 , 124 or 126 of the Income Tax Assessment Act 1997 (except under Subdivision 124-J , 124-K or 124-L of that Act)); and
(b) a company shall be taken to have been a re-valued asset-holding company as at the payment time if, and only if:
(i) the company was an unlisted company as at the payment time; and
(ii) if sub-subparagraph (a)(ii)(A) or (B) applies - the total value of the re-valued assets of the company, as at the disposal time, was not less than 75% of the net worth of the company as at the disposal time; and
(iii) if sub-subparagraph (a)(ii)(C) applies - the total value of the re-valued assets of the company, immediately after the re-valuation, was not less than 75% of the net worth of the company as at the disposal time.
S 46E(2) amended by No 46 of 1998.
46E(3)
For the purposes of this section:
(a) a company shall be taken to have been related to another company at a particular time if, and only if, at that time, a reduction in the value of any shares in the other company could reasonably be expected to have resulted in a reduction in the value of any shares in the first-mentioned company; and
(b) a trust estate shall be taken to have been related to a company at a particular time if, and only if, at that time, a reduction in the value of any shares in the company could reasonably be expected to have resulted in a reduction in the value of any of the property of the trust estate.
46E(4)
For the purposes of subparagraph (2)(a)(i) and subsection (3):
(a) a reference to a share includes a reference to:
(i) an interest in a share; and
(ii) a right or option (including a contingent right or option) to acquire a share or an interest in a share; and
(b) a reference to a beneficial interest in a trust estate includes a reference to a right or option (including a contingent right or option) to acquire a beneficial interest in a trust estate.
46E(5)
For the purposes of this section, the question whether an asset was acquired on or after 20 September 1985 shall be determined in the same manner as the question when a CGT asset was acquired is determined for the purposes of the Income Tax Assessment Act 1997 .
S 46E(5) amended by No 46 of 1998.
46E(6)
For the purposes of this section, an asset of a company shall be taken to have been a re-valued asset of the company if, and only if:
(a) after 4 June 1987, the company paid a dividend to a shareholder wholly or partly out of profits arising from the re-valuation of the asset; and
(b) had the company disposed of the asset immediately after the re-valuation, either of the following subparagraphs would have applied:
(i) any profit that would have arisen on the disposal of the asset would, in whole or in part, have been included in the assessable income of the company or any loss that would have arisen from the disposal of the asset would, in whole or in part, have been allowable as a deduction to the company;
(ii) the company acquired the asset on or after 20 September 1985, the disposal would have been a CGT event, and a capital gain or capital loss arising from the event would not have had to be disregarded (apart from a roll-over under Division 122 , 124 or 126 of the Income Tax Assessment Act 1997 (except under Subdivision 124-J , 124-K or 124-L of that Act)).
S 46E(6) amended by No 46 of 1998.
46E(7)
In calculating the net worth of a company for the purposes of this section, the Commissioner shall, if satisfied that liabilities were discharged or released, or assets acquired, for the purpose, or for purposes that included the purpose, of ensuring that this section would not apply in relation to a shareholder in the company, disregard the discharge or release of those liabilities or the values of those assets, as the case may be.
46E(8)
For the purposes of this section, a company shall be taken to have been an unlisted company as at a particular time unless, as at that time, the company:
(a) had been admitted to the official list of a securities exchange within the meaning of the Securities Industry Act 1980 or a law of a State, of a Territory or of, or of a part of, a foreign country corresponding to that Act; and
(b) had not been removed from that official list.
46E(9)
A reference in this section to the carrying out of an arrangement by a person includes a reference to the carrying out of an arrangement by a person together with another person or other persons.
46E(10)
A reference in this section to the entering into or carrying out of an arrangement includes a reference to the entering into or carrying out of an arrangement before the commencement of this section.
46E(11)
A reference in this section to the obtaining by a taxpayer of a capital tax benefit in connection with an arrangement is a reference to:
(a) an amount not being included in the assessable income of the taxpayer of a year of income by way of profit arising on the disposal of an asset where that amount would have been included, or might reasonably be expected to have been included, in the assessable income of the taxpayer of that year of income if the arrangement had not been entered into or carried out; or
(b) the taxpayer not making a capital gain during the year of income that the taxpayer would have made (or might reasonably be expected to have made) if the arrangement had not been entered into or carried out.
S 46E(11) amended by No 46 of 1998.
46E(12)
A shareholder is not entitled, and shall be deemed never to have been entitled, to a rebate under section 46 or 46A in respect of an asset re-valuation dividend if the dividend was paid under or as the result of an arrangement where:
(a) a taxpayer, being a company (whether or not the shareholder), has obtained a capital tax benefit in connection with the arrangement; and
(b) having regard to:
(i) the manner in which the arrangement was entered into or carried out;
(ii) the form and substance of the arrangement;
(iii) the time at which the arrangement was entered into and the length of the period in which the arrangement was carried out;
(iv) the result in relation to the operation of this Act that, but for this section, would be achieved by the arrangement;
(v) any change in the financial position of the company that has resulted, will result, or may reasonably be expected to result, from the arrangement;
(vi) any change in the financial position of any person who has or has had any connection (whether of a business, family or other nature) with the company, being a change that has resulted, will result, or might reasonably be expected to result from the arrangement;
(vii) any other consequence for the company, or for any person referred to in subparagraph (vi), of the arrangement having been entered into or carried out; and
(viii) the nature of any connection (whether of a business, family or other nature) between the company and any person referred to in subparagraph (vi);
it would be concluded that the person, or one of the persons, who entered into or carried out the arrangement or any part of the arrangement did so for the purpose, or for purposes that included the purpose, of enabling the company to obtain a capital tax benefit in connection with the arrangement or of enabling the company and another taxpayer or other taxpayers each to obtain a capital tax benefit in connection with the arrangement (whether or not that person who entered into or carried out the arrangement or any part of the arrangement is the company or is the other taxpayer or one of the other taxpayers).
46E(13)
A reference in subsection (12) to an entitlement to a rebate includes a reference to a rebate being allowed or allowable, as the case requires.
46E(14)
Nothing in section 170 prevents the amendment of an assessment at any time for the purpose of giving effect to this section.
S 46E inserted by No 108 of 1987.
Archived:
S 46F repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 63, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .