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INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 6A - Transfer of shareholder status for tax purposes  

SECTION 160AQUA  TRANSFER OF SHAREHOLDER STATUS FOR TAX PURPOSES - CUM-DIVIDEND STOCK EXCHANGE SALES AND SECURITIES LENDING ARRANGEMENTS  

160AQUA(1)  [Transfer of shareholder status]  


If:


(a) a franked dividend or exempted dividend is paid to a shareholder in a company (in this section called the ``first shareholder'') in respect of a share in the company (including a dividend that is taken to be paid as a result of one or more previous applications of this section); and


(b) either of the following conditions is satisfied:


(i) at the dividend closing time, the first shareholder was under an obligation to transfer the share to another taxpayer (in this section called the ``transferee'' ) under a contract for the sale of the share where:

(A) the contract is of the kind known as a ``cum-dividend'' contract; and

(B) the contract was entered into in the ordinary course of trading on a stock exchange in Australia or elsewhere;

(ii) all of the following conditions are satisfied:

(A) at the time the dividend was paid, the first shareholder was under an obligation to pay the dividend to the lender under a securities lending arrangement;

(B) the obligation was incurred in the first shareholder's capacity as the borrower under the securities lending arrangement;

(C) the dividend closing time occurred during the borrowing period;
then, for the purposes of Subdivision D of Division 2 of Part III, of section 124ZM and of this Part (other than Divisions 4 and 5 and sections 160AQCB and 160ARX), the dividend is taken to be a dividend paid to the transferee or the lender, as the case may be, as a shareholder in the company instead of to the first shareholder.

160AQUA(2)  [Dividend closing time]  


For the purposes of this section, if dividends are paid to those taxpayers who were shareholders as at a particular time at or before the payment, that time is the dividend closing time in relation to those dividends.


 



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