Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 216 - Cum dividend sales and securities lending arrangements  

Subdivision 216-A - Circumstances where a distribution to a member of a corporate tax entity is treated as having been made to someone else  

SECTION 216-10   Second situation (securities lending arrangements)  

216-10(1)    
The second situation is one in which:

(a) the *corporate tax entity makes a *franked distribution, or a *distribution franked with an exempting credit, to a *member of the entity in respect of a *membership interest in the entity; and

(b) at the time the distribution was made, the member was under an obligation to pay the distribution to another person under a securities lending arrangement; and

(c) the obligation was incurred in the member's capacity as the borrower under the securities lending arrangement; and

(d) the *distribution closing time occurred during the borrowing period.

216-10(2)    
The *distribution is taken to have been made to the other person as a *member of the entity (and not to the member).

Note:

As the other person is the entity receiving the distribution, there may be tax effects for the other person under Division 207 or 208 .

216-10(3)    
The distribution referred to in paragraph (1)(a) includes a distribution that is taken to be made as a result of one or more previous applications of this section or section 216-5 .