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Edited version of private advice
Authorisation Number: 1052261923971
Date of advice: 14 June 2024
Ruling
Subject: Return of capital and special dividends
In order to protect the privacy and commercial in-confidence components of this private binding ruling, the following summary is provided:
Question 1
Will the return of capital satisfy the definition of 'dividend' in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No. The return of capital does not constitute a 'dividend' as defined in subsection 6(1) of the ITAA 1936.
Question 2
Will the Commissioner make a determination in relation to the return of capital under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies?
Answer
No. The Commissioner will not make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to the return of capital.
Question 3
Will the Commissioner make a determination in relation to the return of capital under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies?
Answer
No. The Commissioner will not make a determination under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies in relation to the return of capital.
Question 4
Will the Commissioner make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the shareholders imputation benefits in respect of the special dividends?
Answer
No. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the shareholders imputation benefits in respect of the special dividends.
Question 5
Will the Commissioner make a determination pursuant to paragraph 204-30(3)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to deny the imputation benefits received by the shareholders in relation to the special dividends?
Answer
No. The Commissioner will not make a determination under subsection 204-30(3)(c) of the ITAA 1997 to deny the imputation benefits received by the shareholders in relation to the special dividends.