| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1012753815439
Ruling
Subject: Proposed off-market share buy-back
The Commissioner issued a ruling in relation to a proposed off market share buy-back.
Question 1
Whether the Buy-Back and any subsequent cancellation of shares bought-back will be disregarded under section 159GZZZN of the Income Tax Assessment Act 1936 (ITAA 1936) for the purposes of determining whether:
(a) an amount is included in the assessable income of Entity A;
(b) an amount is allowable as a deduction to Entity A; and
(c) Entity A makes a capital gain or capital loss.
Answer
Yes.
Question 2
Will the Dividend Component of the Buy-Back price be a frankable distribution pursuant to section 202-40 of the Income Tax Assessment Act 1997 (ITAA 1997) and, therefore, will be capable of being franked in accordance with section 202-5 of the ITAA 1997?
Answer
Yes.
Question 3
Will the Commissioner make a determination under paragraph 177EA(5)(a) of the ITAA 1936?
Answer
Yes.
Question 4
Will the Commissioner make a determination under paragraph 204-30(3)(a) of the ITAA 1997?
Answer
No.