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Edited version of private advice
Authorisation Number: 1051615621427
Date of advice: 5 December 2019
Ruling
Subject: Assessable income
Question 1
Is the dividend received by X assessable to it when it is received?
Answer
No. The Commissioner considers that the beneficial ownership in the shares transferred upon contract formation. X held the dividend amount for the benefit of Y.
Question 2
Is the sum received from the X to Y assessable as income of Y?
Answer
Yes. Having reviewed the facts and circumstances, the Commissioner considers that Y was absolutely and presently entitled to the amount when it was received by X.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
X requested the necessary documents to dispose of shares to Y.
Y paid the consideration for the shares. The price reflects the closing value of the shares on the date that the form was completed.
There was an error on the relevant documents. The error was corrected and the forms returned for processing.
The dividend was declared and the shares became ex-dividend.
The transfer of shares was processed after the dividend date.
X received a dividend from the shares and transferred the amount to Y.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1936 section 95
Income Tax Assessment Act 1936 section 97