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This edited version has been archived due to the length of time since original publication.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

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012543048595

Ruling

Subject: In-specie distribution of Securities

Questions at issue

In order to protect the privacy and commercial in-confidence component of this private binding ruling the following summary is provided.

The ruling concerned the following

Issue 1

    1. Will the Commissioner make a determination under subsection 45C(3) of the Income Tax Assessment Act 1936 (ITAA 1936) and thereby impose a debit to the franking account of the taxpayer under subsection 45C(3) in respect of the distribution?

Issue 2

    2. Does the Trust cease to be an employee share trust within the meaning of subsection 130-85(4) of the Income Tax assessment Act 1997 (ITAA 1997), where the trustee receives and sells securities?

Issue 3

    3. The Commissioner was asked questions regarding whether certain transactions would cause the taxpayer's share capital account to become tainted under section 197-5(1) of the ITAA 1997?

The Commissioner has ruled that:

Issue 1

    1. No, the Commissioner will not make a further determination under subsection 45C(3) of the ITAA 1936 that the whole or any part of the distribution will be paid under a scheme for the purpose of avoiding franking debits arising in relation to the distribution from the taxpayer.

Issue 2

    2. No. The identified sale process in respect of the disposal of the securities will not of itself result in the Trust ceasing to satisfy the definition of an employee share trust.

Issue 3

    3. No.


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