INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 197 - Tainted share capital accounts  

Subdivision 197-C - Special provisions about companies whose share capital accounts were tainted when old Division 7B was closed off  

SECTION 197-20   After introduction day, account taken to have become tainted under new Division 197 to extent of previous tainting  

197-20(1)  
Immediately after the introduction day, the company's share capital account is taken to become tainted under new Division 197 as if:


(a) the company had, at that time, transferred an amount (the notionally transferred amount ) to its share capital account from another of its accounts that equalled the tainting amount (the old Division 7B tainting amount ), within the meaning of old Division 7B , in relation to the share capital account immediately before the old Division 7B close-off day; and


(b) none of the exclusions in sections 197-10 to 197-40 of new Division 197 applied, to any extent, in relation to the notionally transferred amount.

197-20(2)  
No franking debit arises under Subdivision 197-B of new Division 197 in relation to the notionally transferred amount.




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