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INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 16K - Effect of buy-backs of shares    View history reference

Subdivision C - Off-market purchases    View history reference

SECTION 159GZZZP  PART OF OFF-MARKET PURCHASE PRICE IS A DIVIDEND  

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159GZZZP(1)  [ Where purchase price treated as dividend]  

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For the purposes of this Act, but subject to subsection (1A), where a buy-back of a share or non-share equity interest by a company is an off-market purchase, the difference between:


(a) the purchase price; and
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(b) the part (if any) of the purchase price in respect of the buy-back of the share or non-share equity interest which is debited against amounts standing to the credit of:

(i) the company's share capital account if it is a share that is bought back; or

(ii) the company's share capital account or non-share capital account if it is a non-share equity interest that is bought back;
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is taken to be a dividend paid by the company:


(c) to the seller as a shareholder in the company; and


(d) out of profits derived by the company; and


(e) on the day the buy-back occurs.

159GZZZP(1A)  [ Capital gain not reduced]  

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If the dividend is included to any extent in the seller's assessable income of any year of income, it is not taken into account to that extent under section 118-20 of the Income Tax Assessment Act 1997 .

159GZZZP(2)  [ Purchase price not dividend]  


The remainder of the purchase price is taken not to be a dividend for the purposes of this Act.

159GZZZP(3)  

(Omitted by No 170 of 1995)


 



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