| Disclaimer 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 private advice
Authorisation Number: 1051954768952
Date of advice: 16 March 2022
Ruling
Subject: Division 7A - deemed dividend
Question
Does the payment by the Company to youconstitute a dividend payable by the Company to youunder section 109C of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No. The payment made by the Company to you discharged an obligation of the Company to pay money to you and therefore, section 109J of the ITAA 1936 will apply so the Company is not taken to pay a dividend to you under section 109C of the ITAA 1936.
This ruling applies for the following period:
Year ending 30 June 20XY
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a shareholder of the Company and you paid an amount to the Company.
The amount was paid by you on the basis of advice from the Company.
You and the Company subsequently agreed that the Company would repay an amount to you on the basis that the previous payment should not have been made.
The agreement between you and the Company resulted in an obligation arising for the Company to pay an amount to you.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 109BC
Income Tax Assessment Act 1936 section 109C
Income Tax Assessment Act 1936 subsection 109C(1)
Income Tax Assessment Act 1936 section 109J