INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision D - Dividends  

SECTION 45Z   ENTITLEMENT TO INTERCORPORATE DIVIDEND REBATE WHERE SHAREHOLDER IS A TRUSTEE OR PARTNERSHIP  

45Z(1A)   Application of section.  

This section:

(a) does not apply to a dividend that is paid in respect of a non-equity share in a company; and

(b) has effect subject to section 45ZA .

45Z(1)   Shareholder a trustee - beneficiary absolutely entitled to share.  

If:

(a) a share in a company (in this subsection called the ``first company'' ) is held by a shareholder as trustee for another company (in this subsection called the ``second company'' ) who is absolutely entitled to the share as against the trustee; and

(b) the second company is not a taxpayer in the capacity of trustee; and

(c) a dividend is paid to the trustee in respect of the share; and

(ca) the second company is a qualified person in relation to the dividend for the purposes of Division 1A of Part IIIAA ; and

(d) the whole or a part of an amount included in the second company's assessable income under section 97 (which whole or part is in this subsection called the ``assessable amount'' ) is attributable to that dividend;

sections 46 to 46F (inclusive) apply as if:

(e) the second company were a shareholder in the first company; and

(f) the dividend were paid by the first company to the second company instead of to the trustee; and

(g) the amount of the dividend were equal to the assessable amount; and

(h) the second company's interest in the share were the share in respect of which the dividend was paid; and

(i) a reference to the year of income in which the dividend was paid to the second company were a reference to the year of income to which the assessable amount relates; and

(j) a reference to a specified date or specified time before, on, at or after which the dividend was paid to the second company were a reference to the date or time before, on, at or after which the dividend was paid to the trustee; and

(k) the question of when the share was issued to the second company were answered by reference to the time when the share was issued to the trustee; and

(l) the question of when the share was issued to a person other than the second company were answered by reference to the time when the share was issued to the other person; and

(m) the question whether the payment of the dividend to the second company may reasonably be regarded as equivalent to the payment of interest on a loan were answered by reference to matters relating to the payment of the dividend to the trustee; and

(n) the question of the extent to which the dividend was paid by the first company to the second company out of particular profits were answered by reference to the dividend paid to the trustee; and

(o) the question of the extent to which the dividend paid to the second company was franked were answered by reference to the dividend paid to the trustee; and

(p) the question of when the dividend paid to the second company was declared were answered by reference to the dividend paid to the trustee.

45Z(2)   Shareholder a trustee - beneficiary not absolutely entitled to share.  

If:

(a) a share in a company (in this subsection called the ``first company'' ) is held by a shareholder as trustee of a trust estate; and

(b) a dividend is paid to the trustee in respect of the share; and

(c) the following conditions are satisfied in relation to a taxpayer, being a company (in this subsection called the ``second company'' ):

(i) the second company is not a taxpayer in the capacity of trustee;

(ii) the second company is not absolutely entitled to the share as against the trustee;

(iia) the second company is a qualified person in relation to the dividend for the purposes of Division 1A of Part IIIAA ;

(iii) an amount is included in the assessable income of the second company of a year of income under subsection 92(1) or section 97 or 100 ;

(iv) the whole or a part of the amount so included in the second company's assessable income (which whole or part is in this subsection called the ``assessable amount'' ) is either:

(A) directly attributable to that dividend; or

(B) indirectly attributable to that dividend, through one or more interposed trusts or partnerships;

sections 46 to 46F (inclusive) apply as if:

(d) the second company were a shareholder in the first company; and

(e) the dividend were paid by the first company to the second company instead of to the trustee; and

(f) the amount of the dividend were equal to the assessable amount; and

(g) if the second company has an interest in the share (whether that interest is held directly or indirectly through one or more interposed trusts or partnerships) - that interest were the share in respect of which the dividend was paid; and

(h) if the second company does not have an interest in the share (including an interest held directly or indirectly through one or more interposed trusts or partnerships):

(i) the second company had an interest in the share; and

(ii) that interest had been acquired by the second company at the time when the share was acquired by the trustee; and

(iii) that interest were the share in respect of which the dividend was paid; and

(i) a reference to the year of income in which the dividend was paid to the second company were a reference to the year of income to which the assessable amount relates; and

(j) a reference to a specified date or specified time before, on, at or after which the dividend was paid to the second company were a reference to the date or time before, on, at or after which the dividend was paid to the trustee; and

(k) the question of when the share was issued to the second company were answered by reference to the time when the share was issued to the trustee; and

(l) the question of when the share was issued to a person other than the second company were answered by reference to the time when the share was issued to the other person; and

(m) the question whether the payment of the dividend to the second company may reasonably be regarded as equivalent to the payment of interest on a loan were answered by reference to matters relating to the payment of the dividend to the trustee; and

(n) the question of the extent to which the dividend was paid by the first company to the second company out of particular profits were answered by reference to the dividend paid to the trustee; and

(o) the question of the extent to which the dividend paid to the second company was franked were answered by reference to the dividend paid to the trustee; and

(p) the question of when the dividend paid to the second company was declared were answered by reference to the dividend paid to the trustee.

45Z(3)   Shareholder a partnership - non-trustee partner.  

If:

(a) a share in a company (in this subsection called the ``first company'' ) is held by a partnership in which another company (in this subsection called the ``second company'' ) is a partner; and

(b) the second company is not a taxpayer in the capacity of trustee; and

(c) a dividend is paid to the partnership in respect of the share; and

(ca) the second company is a qualified person in relation to the dividend for the purposes of Division 1A of Part IIIAA ; and

(d) the whole or a part of an amount included in the second company's assessable income under section 92 (which whole or part is in this subsection called the ``assessable amount'' ) is attributable to that dividend;

sections 46 to 46F (inclusive) apply as if:

(e) the second company were a shareholder in the first company; and

(f) the dividend were paid by the first company to the second company instead of to the partnership; and

(g) the amount of the dividend were equal to the assessable amount; and

(h) the second company's interest in the share were the share in respect of which the dividend was paid; and

(i) a reference to the year of income in which the dividend was paid to the second company were a reference to the year of income to which the assessable amount relates; and

(j) a reference to a specified date or specified time before, on, at or after which the dividend was paid to the second company were a reference to the date or time before, on, at or after which the dividend was paid to the partnership; and

(k) the question of when the share was issued to the second company were answered by reference to the time when the share was issued to the partnership; and

(l) the question of when the share was issued to a person other than the second company were answered by reference to the time when the share was issued to the other person; and

(m) the question whether the payment of the dividend to the second company may reasonably be regarded as equivalent to the payment of interest on a loan were answered by reference to matters relating to the payment of the dividend to the partnership; and

(n) the question of the extent to which the dividend was paid by the first company to the second company out of particular profits were answered by reference to the dividend paid to the partnership; and

(o) the question of the extent to which the dividend paid to the second company was franked were answered by reference to the dividend paid to the partnership; and

(p) the question of when the dividend paid to the second company was declared were answered by reference to the dividend paid to the partnership.

45Z(4)   Shareholder a partnership - trustee partner.  

If:

(a) a share in a company (in this subsection called the ``first company'' ) is held by a partnership; and

(b) a dividend is paid to the partnership in respect of the share; and

(c) the following conditions are satisfied in relation to a taxpayer, being a company (in this subsection called the ``second company'' ):

(i) the second company is not a taxpayer in the capacity of trustee;

(ii) the second company is not a partner in the partnership;

(iia) the second company is a qualified person in relation to the dividend for the purposes of Division 1A of Part IIIAA ;

(iii) an amount is included in the assessable income of the second company of a year of income under subsection 92(1) or section 97 or 100 ;

(iv) the whole or a part of the amount so included in the second company's assessable income (which whole or part is in this subsection called the ``assessable amount'' ) is either:

(A) directly attributable to that dividend; or

(B) indirectly attributable to that dividend, through one or more interposed trusts or partnerships;

sections 46 to 46F (inclusive) apply as if:

(d) the second company were a shareholder in the first company; and

(e) the dividend were paid by the first company to the second company instead of to the partnership; and

(f) the amount of the dividend were equal to the assessable amount; and

(g) if the second company has an interest in the share (whether that interest is held directly or indirectly through one or more interposed trusts or partnerships) - that interest were the share in respect of which the dividend was paid; and

(h) if the second company does not have an interest in the share (including an interest held directly or indirectly through one or more interposed trusts or partnerships):

(i) the second company had an interest in the share; and

(ii) that interest had been acquired by the second company at the time when the share was acquired by the partnership; and

(iii) that interest were the share in respect of which the dividend was paid; and

(i) a reference to the year of income in which the dividend was paid to the second company were a reference to the year of income to which the assessable amount relates; and

(j) a reference to a specified date or specified time before, on, at or after which the dividend was paid to the second company were a reference to the date or time before, on, at or after which the dividend was paid to the partnership; and

(k) the question of when the share was issued to the second company were answered by reference to the time when the share was issued to the partnership; and

(l) the question of when the share was issued to a person other than the second company were answered by reference to the time when the share was issued to the other person; and

(m) the question whether the payment of the dividend to the second company may reasonably be regarded as equivalent to the payment of interest on a loan were answered by reference to matters relating to the payment of the dividend to the partnership; and

(n) the question of the extent to which the dividend was paid by the first company to the second company out of particular profits were answered by reference to the dividend paid to the partnership; and

(o) the question of the extent to which the dividend paid to the second company was franked were answered by reference to the dividend paid to the partnership; and

(p) the question of when the dividend paid to the second company was declared were answered by reference to the dividend paid to the partnership.

45Z(5)   Modifications for corporate unit trusts and public trading trusts.  

A reference in paragraphs (1)(a) and (b), (2)(a) and (c), (3)(b) and (4)(c) to a trustee does not include a reference to the trustee of:

(a) a corporate unit trust within the meaning of Division 6B; or

(b) a public trading trust within the meaning of Division 6C.

45Z(6)   [Assumed unfranked dividend]  

If a determination under paragraph 177EA(5)(b) is made in respect of the assessable amount referred to in subsection (1), (2), (3) or (4), assume that the dividend referred to in paragraph (1)(f), (2)(e), (3)(f) or (4)(e), as the case may be, was an unfranked dividend.