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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051472556050

Date of advice: 8 February 2019

Ruling

Subject: Off-market share buy-back

Question 1

Will the Commissioner make a determination pursuant to subsection 45C(3) of the Income Tax Assessment Act 1936 (ITAA 1936) to debit the franking account of the Company in relation to the Company off market share buy-back?

Answer

No.

This ruling applies for the following periods:

1 July 20xx to 30 June 20xx

Relevant facts and circumstances

1. The Company is an Australian incorporated company, whose ordinary shares are quoted on the official list of the Australian Securities Exchange (ASX).

2. On X date, the Company announced its intention to undertake a capital-only off market share buy-back up to 10% of its ordinary issued share capital.

3. All shares bought back were cancelled, reducing the number of the Company shares on issue.

Relevant legislative provisions

Section 45B of the Income Tax Assessment Act 1936 (ITAA 1936)

Section 45C of the ITAA 1936

All legislative references in this Ruling are to the ITAA 1936, unless otherwise stated.

Reasons for decision

Question 1

The Commissioner will not make a determination under paragraph 45B(3)(b) that section 45C applies to the whole, or a part, of the Buy-Back Price.

The Commissioner will also not make a further determination under subsection 45C(3) in respect of any part of the Buy-Back Price.

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