TAXATION (UNPAID COMPANY TAX) ASSESSMENT ACT 1982

***** Repealed 22 September 1999 *****

SECTION 3   INTERPRETATION  

3(1)  [Definitions]  

In this Act, unless the contrary intention appears:

``agent'' includes a person holding a power of attorney;

``apportionment factor'' , in relation to a primary taxable amount, means:

(a)  in the case of a primary taxable amount that was ascertained by the application of paragraph 5(1)(k) or (2)(k) - the number 1;

(b)  in the case of a primary taxable amount that was ascertained by the application of paragraph 5(1)(m) or (2)(m) - the number ascertained in accordance with the formula

                                  C
                                  -
                                  S
          

where the components C and S have the same respective values as those components had for the purposes of that application of that paragraph;

(c)  in the case of a primary taxable amount that was ascertained by the application of paragraph 5(2)(n) - the number ascertained in accordance with the formula

                                  CN
                                  --
                                  SW,
          

where the components C , N , S and W have the same respective values as those components had for the purposes of that application of that paragraph;

(d)  in the case of a primary taxable amount that was ascertained by the application of paragraph 5(5)(a) - the apportionment factor applicable under paragraph (a), (b) or (c) of this definition in relation to the trustee's taxable amount referred to in paragraph 5(5)(a); and

(e)  in the case of a primary taxable amount that was ascertained by the application of paragraph 5(5)(b) - the number ascertained in accordance with the formula XY , where:

X is the apportionment factor applicable under paragraph (a), (b) or (c) of this definition in relation to the trustee's taxable amount referred to in paragraph 5(5)(b); and

Y is the number that, in ascertaining the primary taxable amount under paragraph 5(5)(b), was multiplied by the trustee's taxable amount referred to in that paragraph;

``Assessment Act'' means the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997;

``associate'' has the same meaning in relation to a person as that expression has in relation to a person in section 26AAB of the Assessment Act;

``company tax'' means ordinary company tax or undistributed profits tax;

``director'' , in relation to a company, includes:

(a)  any person occupying or acting in the position of director of the company, by whatever name called and whether or not validly appointed to occupy or duly authorized to act in the position; and

(b)  any person in accordance with whose directions or instructions the directors of the company are accustomed to act;

``distribution of capital'' , in relation to a company, means a distribution, on the winding-up of the company, of the surplus of the assets of the company over the liabilities of the company;

``distribution of corpus'' , in relation to a trust estate in relation to a particular time, means a distribution of the corpus of the trust estate among the beneficiaries of the trust estate having a vested interest in the corpus at that time;

``eligible promoters class'' , in relation to a promoters taxable amount, means the eligible promoters class ascertained under section 7 and, where applicable, section 11 in relation to that promoters taxable amount;

``eligible taxable amount'' , in relation to a person, means an amount that is a vendors taxable amount in relation to the person or is a promoters taxable amount in relation to an eligible promoters class in which the person is included;

general interest charge means the charge worked out under Division 1 of Part IIA of the Taxation Administration Act 1953.

``late payment tax'' means additional tax payable under section 13;

``object'' , in relation to an assessment, means object against the assessment under section 175A of the Assessment Act;

``objection'' , in relation to an assessment, means an objection against the assessment under section 175A of the Assessment Act;

``ordinary company tax'' , in relation to a company, means:

(a)  income tax assessed under the Assessment Act and levied upon the taxable income of the company, being income tax imposed as such by an Act; and

(b)  additional tax payable by the company under section 207 of the Assessment Act in relation to tax referred to in paragraph (a);

``person'' includes a company and a person in the capacity of trustee of a trust estate;

``prescribed distribution period'' , in relation to a company in relation to a year of income, means the period that, for the purposes of Division 7 of Part III of the Assessment Act, is the prescribed period in relation to the company in relation to that year of income;

``primary taxable amount'' , in relation to a person, means an amount that is a primary taxable amount in relation to the person under section 5;

``promoters recoupment tax'' means tax assessed under this Act and imposed by the Taxation (Unpaid Company Tax - Promoters) Act 1982;

``promoters taxable amount'' , in relation to a person or persons, means an amount that is a promoters taxable amount under section 7 in relation to an eligible promoters class in which the person is, or the persons are, included;

``property'' includes:

(a)  a chose in action;

(b)  any estate, interest, right or power, whether at law or in equity, in or over property; and

(c)  any right to receive income;

``recoupment tax'' means promoters recoupment tax or vendors recoupment tax;

``right to receive income'' means a right of a person to have income that will or may be derived (whether from property or otherwise) paid to, or applied or accumulated for the benefit of, the person;

``scheme'' means any agreement, arrangement, transaction, understanding or scheme, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings;

``secondary taxable amount'' , in relation to a person, means an amount that is a secondary taxable amount in relation to the person under section 6;

``shares'' means shares in the capital of a company and includes stock;

``undistributed amount'' , in relation to a company, means an amount that is an undistributed amount in relation to the company for the purposes of Division 7 of Part III of the Assessment Act;

``undistributed profits tax'' , in relation to a company, means:

(a)  additional tax that the company is liable to pay upon an undistributed amount in relation to the company, being additional tax imposed by any Act for the purposes of Division 7 of Part III of the Assessment Act; and

(b)  additional tax payable by the company under section 207 of the Assessment Act in relation to tax referred to in paragraph (a);

``vendors recoupment tax'' means tax assessed under this Act and imposed by the Taxation (Unpaid Company Tax - Vendors) Act 1982;

``vendors taxable amount'' , in relation to a person, means an amount that is a primary taxable amount or a secondary taxable amount in relation to the person.

3(2)  [Professional adviser to directors]  

For the purposes of the definition of ``director'' in subsection (1), a person shall not be regarded as a person in accordance with whose directions or instructions the directors of a company are accustomed to act by reason only that the directors act on advice given by that person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the directors.

3(3)  [Time of sale or purchase]  

Where under a scheme particular shares are sold or purchased on more than one occasion, a reference in this Act to the sale or purchase of those shares under the scheme is a reference to the first sale or to the first purchase, as the case may be, under the scheme of those shares.

3(4)  [Joint holder of shares]  

A reference in this Act to a joint holder of shares includes a reference to a person who holds the shares in common with another person or persons.

3(5)  [First sale time; last sale time; time of sale]  

In this Act:

(a)  a reference, in relation to a scheme under which shares in a company or companies were sold, to the first sale time is a reference to:

(i) if all the shares that were sold under the scheme were sold at the same time - that time; and

(ii) in any other case - the time when the first of the shares that were sold under the scheme were sold;

(b)  a reference, in relation to a scheme under which shares in a company or companies were sold, to the last sale time is a reference to:

(i) if all the shares that were sold under the scheme were sold at the same time - that time; and

(ii) in any other case - the time when the last of the shares that were sold under the scheme were sold; and

(c)  a reference to the time of sale of shares or an interest in shares under a scheme, being shares or an interest in shares to which a vendors taxable amount, or recoupment tax on a vendors taxable amount, relates, is a reference to:

(i) if all those shares were sold at the same time - that time; and

(ii) in any other case - the time when the last of those shares were sold under the scheme.

3(6)  [First purchase time; last purchase time; time of purchase]  

In this Act:

(a)  a reference, in relation to a scheme under which shares in a company or companies were purchased, to the first purchase time is a reference to:

(i) if all the shares that were purchased under the scheme were purchased at the same time - that time; and

(ii) in any other case - the time when the first of the shares that were purchased under the scheme were purchased;

(b)  a reference, in relation, to a scheme under which shares in a company or companies were purchased, to the last purchase time is a reference to:

(i) if all the shares that were purchased under the scheme were purchased at the same time - that time; and

(ii) in any other case - the time when the last of the shares that were purchased under the scheme were purchased; and

(c)  a reference to the time of purchase of shares under a scheme, being shares to which a promoters taxable amount relates, is a reference to:

(i) if all those shares were purchased at the same time - that time; and

(ii) in any other case - the time when the last of those shares were purchased under the scheme.

3(7)  [Company as trustee]  

In this Act, a reference to a company, in relation to shares, or an interest in shares, in another company shall be read as not including a reference to a company that is a trustee in respect of those shares or that interest.

3(8)  [Purchase of shares]  

In this Act, a reference to the purchase of shares by a person includes a reference to the purchase of shares by the person jointly or in common with another person or other persons.

3(9)  [Assessed tax deemed payable]  

For the purposes of this Act, company tax or recoupment tax that has been assessed shall be deemed to be payable notwithstanding that it has not become due and payable.

3(10)  [Income derived after sale to be disregarded]  

For the purposes of the application of this Act (other than paragraphs 5(1)(d) and (2)(d) and section 7) in relation to a sale or sales of shares under a scheme, a reference to the amount of ordinary company tax or undistributed profits tax payable at a particular time by a company in relation to the year of income in which the last sale time occurred shall, if that amount exceeds the amount (in this subsection referred to as the ``reduced amount'' ) of the ordinary company tax or undistributed profits tax, as the case may be, that would be payable by the company at that time if the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income had been assessed on the basis that, except for the purpose of ascertaining the prescribed distribution period in relation to the year of income, the year of income ended immediately before the last sale time, be read as a reference to the reduced amount.

3(11)  [Deemed date of service of assessment notice on company]  

For the purpose of ascertaining the amount of ordinary company tax or undistributed profits tax that, for the purposes of this Act (other than paragraphs 5(1)(d) and (2)(d)), is payable at a particular time by a company in relation to a year of income in a case where a copy of a notice of assessment in respect of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to that year of income has been served on a person under subsection 18(5), the assessment shall be deemed not to have been served on the company until the day on which the copy was served on the person.

3(12)  [Lawful post-sale tax avoidance scheme]  

For the purposes of the application of this Act in relation to a scheme referred to in paragraph 5(1)(a) or (2)(a) under which shares were sold or a scheme referred to in paragraph 7(1)(a) or (2)(a) under which shares were purchased, where:

(a)  after the last sale time or the last purchase time, as the case may be, a scheme (in this subsection referred to as the ``relevant scheme'' ) was entered into, and carried out, for the purpose, or purposes that included the purpose, of securing the result that the company referred to in subsection 5(1), paragraph 5(2)(e), subsection 7(1) or paragraph 7(2)(d), as the case may be, would not be liable to pay ordinary company tax, or would not be liable to pay undistributed profits tax, in relation to the year of income in which the last sale time or last purchase time, as the case may be, occurred or would be liable to pay less ordinary company tax or less undistributed profits tax in relation to that year of income than it would have been liable to pay if the relevant scheme had not been entered into;

(b)  at the time when the relevant scheme was entered into, it would have been reasonable to expect that the relevant scheme would secure the result referred to in paragraph (a);

(c)  the relevant scheme was not part of, and was not entered into in association with, the arrangement or transaction (in this subsection referred to as the ``stripping arrangement'' ) referred to in paragraph 5(1)(h) or (2)(h) or paragraph 7(1)(g) or (2)(g), as the case may be; and

(d)  the stripping arrangement was not entered into for the purpose, or purposes that included the purpose, of achieving or securing the result referred to in subparagraph 5(1)(h)(i), 5(1)(h)(ii), 5(2)(h)(i), 5(2)(h)(ii), 7(1)(g)(i), 7(1)(g)(ii), 7(2)(g)(i) or 7(2)(g)(ii), as the case may be,

the ordinary company tax or undistributed profits tax payable by the company in relation to that year of income shall be ascertained on the basis that the relevant scheme secured the result referred to in paragraph (a).

3(13)  [Shares sold when beneficial interest passed]  

For the purposes of this Act, where under a scheme:

(a)  a person (in this subsection referred to as the ``shareholder'' ) who was the holder of shares transferred the shares to another person (in this subsection referred to as the ``transferee'' ) to hold upon trust for the shareholder;

(b)  the beneficial interest in the shares later passed to the transferee or another person; and

(c)  consideration was paid or given in respect of the passing of the beneficial interest,

the shareholder shall be deemed to have sold the shares to the transferee or to the other person referred to in paragraph (b), as the case may be, under the scheme at the time when the beneficial interest passed and for the consideration referred to in paragraph (c).

3(14)  [Deemed sale of shares to mortgagee]  

For the purposes of this Act, where under a scheme:

(a)  a person (in this subsection referred to as the ``shareholder'' ) who was the holder of shares mortgaged the shares to secure the repayment of a loan; and

(b)  as a result of the exercise by the mortgagee of rights under the agreement relating to the mortgage, the mortgagee or another person became the beneficial owner of the shares,

the shareholder shall be deemed to have sold the shares to the mortgagee or to the other person referred to in paragraph (b), as the case may be, under the scheme at the time when the mortgagee or that other person, as the case may be, became the beneficial owner of the shares and for consideration equal to the amount of the loan.

3(15)  [Deemed sale of shares to mortgagee]  

For the purposes of this Act, where under a scheme:

(a)  a person (in this subsection referred to as the ``shareholder'' ) who was the holder of shares mortgaged the shares to secure the repayment of a loan made to the shareholder by another person (in this subsection referred to as the ``mortgagee'' );

(b)  the shareholder transferred the shares to the mortgagee to hold upon trust for the shareholder; and

(c)  the shareholder transferred his equity of redemption in the shares to the mortgagee in consideration of the discharge of the loan,

the shareholder shall be deemed to have sold the shares to the mortgagee under the scheme at the time when the equity of redemption was transferred and for consideration equal to the amount of the loan.