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This edited version has been archived due to the length of time since original publication.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 private ruling

Authorisation Number: 1011975478160

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Ruling

Subject: On-market share buy-back

Questions at issue

The ruling concerned whether:

    1. the proposed on-market share buy-back (Proposed Transaction) consist solely of on-market purchases for the purposes of Division 16K of the Income Tax Assessment Act 1936 (ITAA 1936).

    2. a franking debit will be included in Company A's franking account under Item 9 of subsection 205-30(1) of the Income Tax Assessment Act 1997 (ITAA 1997) as a result of the Proposed Transaction.

    3. Company A will be liable for franking deficit tax in respect of the year ended 30 June 2012 as a result of the Proposed Transaction.

    4. the Commissioner will make a determination under subsection 45C(3) of the ITAA 1936 in relation to the on-market share buy-back.

    5. Company A's share capital account will be tainted under Division 197 of the ITAA 1997 as a result of the Proposed Transaction.

The Commissioner ruled that:

    1. The Proposed Transaction consists solely of on-market purchases for the purposes of Division 16K of the ITAA 1936.

    2. A franking debit will not be included in Company A's franking account under Item 9 of subsection 205-30(1) of the ITAA 1997 as a result of the Proposed Transaction.

    3. Company A will not be liable for franking deficit tax in respect of the year ended 30 June 2012 as a result of the Proposed Transaction.

    4. The Commissioner will not make a determination under subsection 45C(3) of the ITAA 1936 in relation to the on-market share buy-back.

    5. Company A's share capital account will not be tainted under division 197 of the ITAA 1997 as a result of the Proposed Transaction.


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