INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 2A - Calculation of taxable income  

Subdivision B - Calculation of taxable income where disqualifying event occurs  

SECTION 50E   DIVISIBLE AMOUNTS OF ASSESSABLE INCOME  

50E(1)   [Calculation of divisible amounts]  

For the purposes of this Subdivision, the following amounts are divisible amounts in relation to a company in relation to a year of income:

(a) any amount included in the assessable income of the company of the year of income in respect of an insurance recovery received by the company in any year of income, being an insurance recovery to which section 26B applies;

(b) any amount included in the assessable income of the company of the year of income under paragraph 26BA(6)(b) ;

(c) where an amount is included in the assessable income of the company of the year of income under subsection 36(1) in respect of a disposal of live stock by the company and the company has made an election under subsection 36(3) in respect of any profit arising on the disposal - so much of the amount included in the assessable income of the company as is equal to the amount of that profit;

(d) any amount included in the assessable income of the company of the year of income under paragraph 36(3A)(b) ;

(e) any amount included in the assessable income of the company of the year of income under paragraph 36AAA(2)(c) or (d) or (2A)(g) or (h);

(f) where an amount is included in the assessable income of the company of the year of income under paragraph 36AA(2)(a) by reason that the company has made an election under subsection 36AA(1) in relation to the profit arising in respect of the death or destruction of live stock - so much of the amount included in the assessable income of the company as is equal to the amount of that profit;

(g) any amount included in the assessable income of the company of the year of income under paragraph 36AA(2)(c) ;

(ga) any amount included in the assessable income of the company of the year of income under subsection 70A(5) ;

(h) any amount included in the assessable income of the company of the year of income under section 92 ;

(j) where an amount is included in the assessable income of the company of the year of income under section 97 or 98A in respect of a share of the net income of a trust estate and the Commissioner considers that the whole or a part of that share of the net income was derived from income that was derived during a period that is a relevant period in relation to the company in relation to the year of income - that share of the net income, or that part of the share of the net income, as the case may be.

50E(1A)   [Some amounts not divisible]  

For the purposes of this Subdivision, so much of any amount included in a company's assessable income of a year of income under section 97 or 98A as is a capital gain that forms part of a net capital gain is not a divisible amount in relation to the company in relation to the year of income.

50E(2)   [Divisible amount in relation to a relevant period]  

For the purposes of the application of subparagraph 50B(4)(a)(ii) in relation to a relevant period in relation to a company in relation to a year of income -

(a) where -

(i) the assessable income of the company of the year of income includes a divisible amount in respect of an insurance recovery received by the company in the year of income, being an insurance recovery to which section 26B applies;

(ii) the amount is included in the assessable income of the company of the year of income otherwise than under subsection (6) or (7) of that section; and

(iii) the insurance recovery was received by the company before the commencement of, or during, the relevant period,

so much of that divisible amount as bears to that divisible amount the same proportion as the number of whole days (if any) in the relevant period, being whole days occurring after the time when the insurance recovery was received, bears to the number of whole days in the year of income, being whole days occurring after the time when the insurance recovery was received, shall be deemed to be included in the assessable income of the company of the relevant period;

(b) where a divisible amount is included in the assessable income of the company of the year of income under subsection 26B(6) or (7) , so much of that divisible amount as bears to that divisible amount the same proportion as the number of whole days (if any) in the relevant period bears to 365 shall be deemed to be included in the assessable income of the company of the relevant period;

(c) where -

(i) a divisible amount is included in the assessable income of the company of the year of income under paragraph 26BA(6)(b) by reason that an election was made by the company in relation to the shearing of sheep that, by reason of fire, drought or flood, took place at a time earlier than the time at which, but for that fire, drought or flood, that shearing would ordinarily have taken place; and

(ii) that shearing would ordinarily have taken place during the relevant period,

the assessable income of the company of the relevant period shall be deemed to include that divisible amount;

(d) where a divisible amount is included in the assessable income of the company of the year of income under subsection 36(1) in respect of a disposal of live stock by the company during the year of income and before the commencement of, or during, the relevant period, there shall be deemed to be included in the assessable income of the company of the relevant period an amount equal to so much of that divisible amount as bears to one-fifth of that divisible amount the same proportion as the number of whole days (if any) in the relevant period, being whole days occurring after the time when the disposal took place, bears to the number of whole days in the year of income, being whole days occurring after the time when the disposal took place;

(e) where a divisible amount is included in the assessable income of the company of the year of income under paragraph 36(3A)(b) , so much of that divisible amount as bears to that divisible amount the same proportion as the number of whole days (if any) in the relevant period bears to 365 shall be deemed to be included in the assessable income of the company of the relevant period;

(f) where a divisible amount is included in the assessable income of the company of the year of income under paragraph 36AAA(2)(c) or (d) or (2A)(g) or (h), so much of that divisible amount as bears to that divisible amount the same proportion as the number of whole days (if any) in the relevant period bears to 365 shall be deemed to be included in the assessable income of the company of the relevant period;

(g) where a divisible amount is included in the assessable income of the company of the year of income under paragraph 36AA(2)(a) by reason that the company has made an election under subsection 36AA(1) in relation to the profit arising in respect of the death or destruction of live stock during the year of income and before the commencement of, or during, the relevant period, there shall be deemed to be included in the assessable income of the company of the relevant period an amount equal to so much of that divisible amount as bears to one-fifth of that divisible amount the same proportion as the number of whole days (if any) in the relevant period, being whole days occurring after the time when the death or destruction took place, bears to the number of whole days in the year of income, being whole days occurring after the time when the death or destruction took place;

(h) where the assessable income of the company of the year of income includes a divisible amount that is included in the assessable income of the company under paragraph 36AA(2)(c) or under subsection 36AA(5) , so much of that divisible amount as bears to that divisible amount the same proportion as the number of whole days (if any) in the relevant period bears to 365 shall be deemed to be included in the assessable income of the company of that relevant period;

(ha) where:

(i) a divisible amount is included in the assessable income of the company of the year of income under subsection 70A(5) by virtue of a recoupment or recoupments in respect of expenditure of a capital nature incurred by the company on the connection of mains electricity facilities;

(ii) the year of income is the first year of income in which the company incurred expenditure of a capital nature on that connection; and

(iii) before the commencement of, or during, the relevant period, the company incurred expenditure of a capital nature on that connection;

a proportion of that divisible amount equal to the proportion that the number of whole days (if any) in the relevant period (being whole days occurring after the time when the company first incurred expenditure of a capital nature on that connection) bears to the number of whole days in the year of income (being whole days occurring after the time when the company first incurred expenditure of a capital nature on that connection) shall be deemed to be included in the assessable income of the company of the relevant period;

(hb) where:

(i) a divisible amount is included in the assessable income of the company of the year of income under subsection 70A(5) by virtue of a recoupment or recoupments in respect of expenditure of a capital nature incurred by the company on the connection of mains electricity facilities; and

(ii) the year of income is not the first year of income in which the company incurred expenditure of a capital nature on that connection;

a proportion of that divisible amount equal to the proportion that the number of whole days (if any) in the relevant period bears to 365 shall be deemed to be included in the assessable income of the company of the relevant period;

(j) where, during the whole or a part of the relevant period, the company was a partner in a partnership that had a notional net income in respect of the relevant period, the assessable income of the company of the relevant period shall be deemed to include -

(i) where, for the purposes of section 92 , the partnership had a net income of the year of income of the partnership - so much of the amount of the notional net income of the partnership in respect of the relevant period as bears to the amount of that notional net income the same proportion as the individual interest of the company in the net income of the partnership of that year of income of the partnership bears to the amount of the net income of the partnership of that year of income;

(ii) where, for the purposes of section 92 , the partnership incurred a partnership loss in the year of income of the partnership - so much of the amount of the notional net income of the partnership of the relevant period as bears to the amount of that notional net income the same proportion as the individual interest of the company in the partnership loss of the partnership bears to the amount of that partnership loss; and

(iii) in any other case - so much of the notional net income of the partnership in respect of that relevant period as the Commissioner considers fair and reasonable having regard to the extent of the interest of the company in the partnership;

(k) where the assessable income of the company of the year of income includes a divisible amount that is included in the assessable income of the company of the year of income under section 92 in respect of the individual interest of the company in the net income of a partnership of a year of income and the period that constitutes that year of income of the partnership is not the same period as the period that constitutes the year of income of the company, so much of that divisible amount as the Commissioner considers fair and reasonable having regard to all the relevant circumstances shall be deemed to be included in the assessable income of the company of the relevant period; and

(m) there shall be deemed to be included in the assessable income of the company of the relevant period any amount that, by reason of paragraph (1)(j), is a divisible amount in relation to that relevant period.