House of Representatives

Supplementary Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon P.J. Keating, MP)

GENERAL OUTLINE

Broadly, the amendment to the Bill will ensure that where shares held by a subsidiary in its holding company were cancelled after 11 August 1988 and on or before 30 November 1988, the income tax position of the subsidiary is the same as it would have been had the shares been cancelled, or otherwise disposed of, for a consideration equal to their cost price.