Taxation Laws Amendment Act (No. 2) 1999 (93 of 1999)

Schedule 4   Franking credits, franking debits and the intercorporate dividend rebate

Income Tax Assessment Act 1936

25   Application of amendments

(1) Subject to this item, the amendments made by this Schedule apply in respect of shares, or interests in shares, where the shares or interests were acquired by the taxpayer on or after 1 July 1997, except where the shares or interests were acquired under a contract made before 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

(2) If:

(a) a taxpayer has acquired, or acquires, shares or an interest in shares on or after 1 July 1997; and

(b) the acquisition constituted, or constitutes, an acquisition or reacquisition of replacement securities for the purposes of subparagraph 26BC(3)(a)(ii) of theIncome Tax Assessment Act 1936;

the acquisition is taken for the purposes of subitem (1) to have occurred before 1 July 1997.

(3) If:

(a) a taxpayer acquired, or is taken for the purposes of subitem (1) to have acquired, before 1 July 1997 an interest in shares:

(i) under a trust; or

(ii) as a partner in a partnership; and

(b) the shares, or an interest in the shares, was or is distributed to the taxpayer on or after that date in satisfaction of the interest referred to in paragraph (a);

the acquisition of the shares or interest so distributed, to the extent to which the shares or interest distributed satisfied the interest referred to in paragraph (a), is taken for the purposes of subitem (1) to have occurred before that date.

(4) If:

(a) shares (the bonus shares ) have been issued to a taxpayer in respect of existing shares; and

(b) the existing shares were acquired, or are taken for the purposes of subitem (1) to have been acquired, by the taxpayer before 1 July 1997; and

(c) no part of the bonus shares has been, or is taken to have been, a dividend included in the taxpayer's assessable income;

the acquisition of the bonus shares is taken for the purposes of subitem (1) to have occurred before that date.

(5) Despite subitem (1):

(a) references to shares, or interests in shares, in Subdivisions BA and BB of Division 7 of Part IIIAA of theIncome Tax Assessment Act 1936 include references to shares, or interests in shares, acquired by the taxpayer before 1 July 1997; and

(b) in calculating the net position of a taxpayer or fund in relation to shares, or an interest in shares, for the purposes of section 160APHJ of theIncome Tax Assessment Act 1936, regard is to be had to the long positions and the short positions of the taxpayer or fund in relation to shares, or interests in shares, acquired before 1 July 1997.

(6) Section 160APHL of theIncome Tax Assessment Act 1936 is taken to have come into effect at 3.00 pm by legal time in the Australian Capital Territory on 31 December 1997 and applies to:

(a) all trusts (other than widely held public share-trading trusts) that receive dividends from shares, or distributions in respect of interests in shares, but only in relation to shares or interests in shares acquired after that time (other than shares or interests acquired under an obligation contained in a contract made before that time); and

(b) widely held public share-trading trusts established after that date.

(7) If:

(a) the trustee of a trust (other than a widely held public share-trading trust) acquired an interest in shares before 3.00 pm by legal time in the Australian Capital Territory on 31 December 1997; and

(b) the shares, or an interest in the shares, was distributed to the trustee after that time in satisfaction of the interest referred to in paragraph (a);

the acquisition of the shares or interest so distributed, to the extent to which the shares or interest distributed satisfied the interest referred to in paragraph (a), is taken for the purposes of paragraph (a) of subitem (6) to have occurred before that time.

(8) If:

(a) shares (the bonus shares ) have been issued to the trustee of a trust in respect of existing shares; and

(b) the existing shares were acquired by the trustee before 3.00 pm by legal time in the Australian Capital Territory on 31 December 1997; and

(c) no part of the bonus shares has been, or is taken to have been, a dividend included in the net income of the trust estate;

the acquisition of the bonus shares is taken for the purposes of paragraph (a) of subitem (6) to have occurred before that time.

(9) A reference in a provision inserted in theIncome Tax Assessment Act 1936 by this Schedule to a related payment in respect of a dividend or distribution:

(a) is a reference to a related payment under an arrangement entered into after 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997, whether or not the shares or interests in shares in respect of which the dividend was paid or the distribution was made were acquired by the taxpayer before or after that time; but

(b) does not include a reference to a related payment made under a contract for the sale of derivatives known as Share Price Index Futures that was made before 2 July 1998.

(10) Section 160APHN of theIncome Tax Assessment Act 1936 has effect for the purposes of subitem (9) of this item in the same way as it has effect for the purposes of Division 1A of Part IIIAA of that Act.

(11) In this item:

arrangement has the same meaning as in Division 1 of Part IIIAA of theIncome Tax Assessment Act 1936.

widely held public share-trading trust means a widely held trust that:

(a) is open to investment by members of the public; and

(b) buys and sells shares with a view to profit.

widely held trust has the same meaning as in Division 1A of Part IIIAA of theIncome Tax Assessment Act 1936.