INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 16K - Effect of buy-backs of shares  

Subdivision C - Off-market purchases  

SECTION 159GZZZP   PART OF OFF-MARKET PURCHASE PRICE IS A DIVIDEND  

159GZZZP(1)   [ Where purchase price treated as dividend]  

For the purposes of this Act, but subject to subsection (1A), where a buy-back of a share or non-share equity interest by a company is an off-market purchase, the difference between:


(a) the purchase price; and


(b) the part (if any) of the purchase price in respect of the buy-back of the share or non-share equity interest which is debited against amounts standing to the credit of:


(i) the company's share capital account if it is a share that is bought back; or

(ii) the company's share capital account or non-share capital account if it is a non-share equity interest that is bought back;

is taken to be a dividend paid by the company:


(c) to the seller as a shareholder in the company; and


(d) out of profits derived by the company; and


(e) on the day the buy-back occurs.

159GZZZP(1A)   [ Capital gain not reduced]  

If the dividend is included to any extent in the seller's assessable income of any year of income, it is not taken into account to that extent under section 118-20 of the Income Tax Assessment Act 1997 .

159GZZZP(2)   [ Purchase price not dividend]  

The remainder of the purchase price is taken not to be a dividend for the purposes of this Act.

159GZZZP(3)  
(Omitted by No 170 of 1995)


 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.