INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION

Division 2 - Income

Subdivision D - Dividends

SECTION 45ZB REDUCTION OF INTERCORPORATE DIVIDEND REBATE IN CERTAIN CIRCUMSTANCES

45ZB(1) [Application]

This section applies where:

(a) a partnership or the trustee of a trust has made an election under section 160APHR in relation to shares, or interests in shares, held by the partnership or trustee and managed by or on behalf of the partnership or trust as or in a discrete fund; and

(b) dividends (the relevant dividends ) are paid on the shares during the year of income.

45ZB(2) [Interpretation]

For the purposes of this section:

(a) a notional dividend rebate is taken to apply in relation to the partnership or trust in respect of the relevant dividends, and the amount of the notional dividend rebate is the amount of the rebate under section 46 or 46A to which the partnership or trust would be entitled if:

(i) the partnership or trustee were a company (other than a life assurance company) and a resident of Australia; and

(ii) the average rate of tax payable by the partnership or trust were the general company tax rate; and

(iii) the amounts (the included amounts ) included in the net income of the partnership or trust estate, or in the partnership loss, as the case may be, that are, or are attributable to, the relevant dividends were dividends paid to the company and included in its assessable income; and

(b) a notional ceiling amount is taken to apply in relation to the fund in relation to the year of income, and the notional ceiling amount is the amount that would be the ceiling amount in relation to the fund in relation to the year of income for the purposes of section 160AQZF if subparagraphs (a)(i) and (ii) of this subsection applied.

45ZB(3) [Excess rebate amount]

If the notional dividend rebate exceeds the notional ceiling amount, the excess is an excess rebate amount in respect of the included amounts.

45ZB(4) [Share of partner]

Each partner in the partnership or beneficiary of the trust estate who is entitled to a share in the included amounts is taken to have a share in the excess rebate amount in proportion to the share of the partner or beneficiary in the included amounts.

45ZB(5) [Share in excess rebate amount]

Any person who has an interest in the included amounts acquired indirectly through a partner or beneficiary referred to in subsection (4), or through one or more partnerships or trusts interposed between such a partner or beneficiary and the person, is also taken to have a share in the excess rebate amount corresponding to the person's indirect interest in the included amounts.

45ZB(6) [Reduction of company rebate]

If:

(a) there is, in relation to a company, an assessable amount referred to in section 45Z that is directly or indirectly attributable to the included amounts; and

(b) the company has a share in the excess rebate amount;

the rebate to which the company is entitled (because of section 45Z ) under section 46 or 46A in respect of an amount attributable to the relevant dividends is reduced by:

(c) unless paragraph (d) applies - the amount of the company's share in the excess rebate amount; or

(d) if the company's average rate of tax is not the general company tax rate - the amount worked out by using the formula:

The amount of the
company's share in the
excess rebate amount

The company's average rate of tax
General company tax rate

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