Tax Laws Amendment (2006 Measures No. 3) Act 2006 (80 of 2006)

Schedule 4   Simplified imputation system (share capital tainting rules)

Part 3   Amendment of the old share capital tainting rules

Division 1   Amendments

Income Tax Assessment Act 1936

16   After subsection 160ARDM(2A)

Insert:

(2B) If the transfer of an amount as mentioned in subsection (1) is a transfer under a debt/equity swap (as defined in subsection (5)), the following provisions have effect:

(a) if the transferred amount does not exceed the lesser of:

(i) the market value of the shares referred to in subsection (5); and

(ii) so much of the debt referred to in subsection (5) as is discharged, released or extinguished in return for the shares;

subsection (1) does not apply to the transferred amount;

(b) if the transferred amount exceeds the lesser of the amounts referred to in paragraph (a), subsection (1) applies only to the excess.

(2C) Subsection (1) does not apply to an amount transferred as mentioned in that subsection if:

(a) it is transferred from an option premium reserve of the company; and

(b) the transfer is because of the exercise of options to acquire shares in the company; and

(c) premiums in respect of those options were credited to the option premium reserve.