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Edited version of private advice
Authorisation Number: 1052325663012
Date of advice: 05 November 2024
Ruling
Subject: Capital return
Question
As a consequence of the Company Hold Capital Return, will Hold Co be required under subsection 45D(1A) of the Income Tax Assessment Act (ITAA 1936) to give a copy of the Commissioner's determination to Foreign Co?
This ruling applies for the following period:
Income year ending XX December 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Company Hold, a company incorporated in Australia, is wholly owned by Company Foreign.
Company Hold is the head entity of a group of companies.
As a result of a restructure, Company Hold disposed of a subsidiary.
Company Hold proposes to:
• distribute the profits from the disposal as a dividend, and
• conduct a return of share capital (the Company Hold Capital Return).
The share capital account of Company Hold is not tainted within the meaning of Division 197 of the ITAA 1997.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 45A
Income Tax Assessment Act 1936 section 45B
Income Tax Assessment Act 1936 subsection 45D(1A)
Reasons for decision
Subsection 45D(1A) of the ITAA 1936 provides that where the Commissioner gives notice of a determination to
a company in accordance with subsection 45D(1) of the ITAA 1936, that company must, in the case of a
determination under sections 45A or 45B of the ITAA 1936, give a copy of the notice to the advantaged shareholder referred to in section 45A, or the relevant taxpayer referred to in section 45B of the ITAA 1936.
In this case, the Commissioner will not make a determination under:
• section 45A of the ITAA 1936 - As Hold Co only has one shareholder, there is no streaming of capital benefits to some shareholders and dividends to other shareholders as required by subsection 45A(1) of the ITAA 1936.
• Section 45B of the ITAA 1936 - because the requirements of paragraph 45B(2)(c) of the ITAA 1936 is not satisfied.
Therefore, there is no notice of determination from the Commissioner for Hold Co to give to Foreign Co pursuant to subsection 45D(1A) of the ITAA 1936.