Income Tax Assessment Act 1997



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 216-5   First situation (cum dividend sales)  

The first 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 *distribution closing time, the member is under an obligation to transfer the membership interest to another person under a contract for the sale of the membership interest; and

(c) the contract:

(i) requires that the distribution be paid on to the other person; and

(ii) is entered into in the ordinary course of trading on an *approved stock exchange in Australia or elsewhere.

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


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

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 216-10 .


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.