TAXATION (UNPAID COMPANY TAX) ASSESSMENT ACT 1982

***** Repealed 22 September 1999 *****

SECTION 1  SHORT TITLE   1 

This Act may be cited as the Taxation (Unpaid Company Tax) Assessment Act 1982.

SECTION 2  COMMENCEMENT   2 

This Act shall come into operation on the day on which it receives the Royal Assent.

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)  aperson (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.

SECTION 4  APPLICATION OF ASSESSMENT ACT  

4(1)  [Assessment and collection provisions]  

Unless the contrary intention appears in this Act, sections 6 (other than the definition of ``spouse'' in subsection (1)) and 7A, Part II, section 21, Part IV, Division 1 of Part VI, and Parts VII and VIII of the Assessment Act, and regulations made under that Act, apply for the purposes of the assessment and collection of recoupment tax, and the collection of late payment tax, in like manner, mutatis mutandis, as those provisions apply for the purposes of the assessment and collection of income tax under the Assessment Act.

4(2)  [Provisions apply mutatis mutandis ]  

A reference in this Act to a provision of the Assessment Act shall, unless the contrary intention appears, be read as a reference to that provision in its application, in accordance with subsection (1), for the purposes of this Act.

4(3)  [Commissioner's annual report]  

For the purposes of section 14 of the Assessment Act, this Act shall be deemed to be part of the Assessment Act.

4(4)  [Secrecy]  

Nothing in section 16 of the Assessment Act prevents:

(a)  the disclosure, to a person who is, or in the opinion of the Commissioner is likely to become, liable to pay recoupment tax, of information relating to the affairs of another person where that information was, or in the opinion of the Commissioner is likely to be, taken into account in the assessment of the liability of the first-mentioned person to pay recoupment tax; or

(b)  the disclosure, to a person who is, or in the opinion of the Commissioner is likely to become, jointly and severally liable with other persons to pay promoters recoupment tax, of the identity of, and particulars of the liability of, any of the other persons liable to pay that promoters recoupment tax.

4(5)  [Information concerning stripping arrangement]  

Where:

(a)  a person makes a request in writing to the Commissioner that the Commissioner disclose to the person information relating to an arrangement or transaction referred to in paragraph 5(1)(h) or (2)(h); and

(b)  the arrangement or transaction was, or in the opinion of the Commissioner, is likely to be, taken into account in the assessment of the liability of the person to pay vendors recoupment tax,

the Commissioner shall, notwithstanding section 16 of the Assessment Act, disclose to the person all information (including the identities of the parties to the arrangement or transaction) known to the Commissioner that is relevant to that liability and relates to the arrangement or transaction.

4(6)  [Amendment of assessments]  

Nothing in section 170 of the Assessment Act prevents the amendment, at any time, of an assessment for the purpose of giving effect to subsection 5(4), paragraph 5(9)(d), subsection 6(2), 6(18), 8(5), 8(6) or 8(7) or section 16 or 17 of this Act.

4(7)  (Omitted by No 23 of 1987)

4(8)  [Proceedings against promoters]  

Proceedings shall not be instituted against a person under section 209 of the Assessment Act for the recovery of any promoters recoupment tax from the person unless:

(a)  the notice of assessment in respect of that tax was served on the person; or

(b)  the Commissioner has served on the person a notice in writing to the effect that it is intended to commence proceedings for recovery of that tax and a period of 30 days has expired after the date of service of the notice.

4(9)  [Liquidators and receivers]  

Unless the contrary intention appears, a reference in section 215 of the Assessment Act to tax shall be deemed to include a reference to:

(a)  recoupment tax;

(b)  late payment tax; and

(c)  additional tax under Part VII of the Assessment Act in its application for the purposes of this Act.

4(10)  [Remedies against estate of deceased taxpayer]  

Where a person dies after an assessment is made of the recoupment tax payable by the person on an eligible taxable amount:

(a)  the Commissioner has the same powers and remedies against the trustee of the deceased person's estate in respect of the collection of recoupment tax and late payment tax on that eligible taxable amount as he would have had against the deceased person if the deceased person were alive; and

(b)  where the eligible taxable amount is a promoters taxable amount, the trustee has the same rights under section 11 in relation to a declaration in respect of the exclusion of the deceased person from the eligible promoters class to which the promoters taxable amount relates as the deceased person would have had if he were alive.

4(11)  [Service of assessment notice on promoter]  

For the purposes of the application of any of the provisions of the Assessment Act in accordance with subsection (1), where 2 or more persons are jointly and severally liable to pay recoupment tax on a promoters taxable amount, service of a notice of assessment or any other notice in respect of that liability on any of those persons shall be deemed to be service of the notice on each of those persons.

4(12)  [Assessment notice need not identify all promoters]  

The validity of an assessment of the recoupment tax payable on a promoters taxable amount by the persons included in an eligible promoters class in relation to that promoters taxable amount is not affected by reason that the notice of assessment identifies only one or some of the persons included in that eligible promoters class.

SECTION 5  PRIMARY TAXABLE AMOUNTS  

5(1)  [Sale of shares in taxable company]  

Where:

(a)  under a scheme entered into, whether in Australia or outside Australia, on or after 1 January 1972 and before 4 December 1980, some or all of the shares in a company were sold;

(b)  the sale or sales of the shares referred to in paragraph (a) occurred before the commencement of this Act;

(c)  immediately before the first sale time, the person or persons who sold the shares referred to in paragraph (a) was or were, by virtue of rights attaching to the shares, capable of controlling more than 90% of the voting power in the company;

(d)  the total consideration paid or given in respect of the sale or sales under the scheme of the shares referred to in paragraph (a) exceeds an amount ascertained in accordance with the formula A - (L + T), where:

A is the total value, immediately before the last sale time, of the assets of the company;

L is the total amount of the liabilities of the company immediately before the last sale time; and

T is the amount of the company tax liability of the company immediately before the last sale time, reduced by any part of that company tax liability that is taken into account in ascertaining component L;

(e)  an assessment of ordinary company tax or undistributed profits tax has been made under the Assessment Act, whether before or after the commencement of this Act, in relation to the company in relation to a year of income (in this subsection is referred to as the ``relevant year of income''), being the year of income in which the last sale time occurred or a preceding year of income;

(f)  the period for objecting against the assessment has expired and any objection against the assessment has been finalised;

(g)  at any time (in this subsection referred to as the ``relevant time'') after the commencement of this Act, there remains unpaid an amount (in this subsection referred to as the ``overdue company tax'') of ordinary company tax or undistributed profits tax, as the case may be, due and payable by the company in relation to the relevant year of income;

(h)  before the relevant time, an arrangement or transaction (whether or not the arrangement or transaction was, or was part of, the scheme) was entered into that secured or achieved the result that:

(i) in a case to which subparagraph (ii) does not apply - at the relevant time, the company was unable, having regard to other debts of the company, to pay to the Commissioner all the company tax due and payable by the company at the relevant time; or

(ii) if the company ceased to exist before the relevant time - immediately before the company ceased to exist, the company would have been unable, having regard to other debts of the company, to pay to the Commissioner all the company tax that would have been due and payable by the company immediately before it ceased to exist if the company tax due and payable by the company at the relevant time had been due and payable by the company immediately before it ceased to exist; and

(j)  if the company carried on a business immediately before the last sale time, not being a business that consisted only of deriving income from property - the company did not continue to carry on that business after the last sale time,

the following provisions have effect:

(k)  if all the shares referred to in paragraph (a) were sold under the scheme by one person - a primary taxable amount equal to the overdue company tax shall be taken to exist at the relevant time in relation to that person; or

(m)  in any other case - a primary taxable amount shall be taken to exist at the relevant time in relation to each person who, as the holder or one of the joint holders of any of the shares referred to in paragraph (a), sold the shares, or his interest in the shares, as the case may be, under the scheme and that primary taxable amount is an amount ascertained in accordance with the formula

                                    OC 
                                    ---,
                                     S 

      

where:

O is the amount of the overdue company tax;

C is the number of whole dollars in the amount or value of the consideration paid or given in respect of the sale of the shares or interest by the person; and

S is the number of whole dollars in the amount or value of the total consideration paid or given in respect of the sale or sales under the scheme of all the shares referred to in paragraph (a).

5(2)  [Sale of controlling interest in two or more companies]  

Where:

(a)  under a scheme entered into, whether in Australia or outside Australia, on or after 1 January 1972 and before 4 December 1980, some or all of the shares in one or more companies were sold;

(b)  the sale or sales of the shares referred to in paragraph (a) occurred before the commencement of this Act;

(c)  immediately before the first sale time, the person or persons who sold the shares referred to in paragraph (a) was or were, by virtue of rights attaching to the shares, capable of controlling, either directly or through one or more interposed companies, trustees or partnerships, more than 90% of the voting power in each of 2 or more companies (in this subsection referred to as the ``eligible companies'');

(d)  the total consideration paid or given in respect of the sale or sales under the scheme of the shares referred to in paragraph (a) exceeds an amount ascertained in accordance with the formula A - (L + T), where:

A is the aggregate of the total values, immediately before the last sale time, of the assets of the eligible companies;

L is the aggregate of the total amounts of the liabilities of the eligible companies immediately before the last sale time; and

T is the aggregate of the amounts of the company tax liabilities of the eligible companies immediately before the last sale time reduced by any part of those company tax liabilities that is taken into account in ascertaining component L;

(e)  an assessment of ordinary company tax or undistributed profits tax has been made under the Assessment Act, whether before or after the commencement of this Act, in relation to a company (in this subsection referred to as the ``taxable company''), being one of the eligible companies, in relation to a year of income (in this subsection referred to as the ``relevant year of income''), being the year of income in which the last sale time occurred or a preceding year of income;

(f)  the period for objecting against the assessment has expired and any objection against the assessment has been finalised;

(g)  at any time (in this subsection referred to as the ``relevant time'') after the commencement of this Act, there remains unpaid an amount (in this subsection referred to as the ``overdue company tax'') of ordinary company tax or undistributed profits tax, as the case may be, due and payable by the taxable company in relation to the relevant year of income;

(h)  before the relevant time, an arrangement or transaction (whether or not the arrangement or transaction was, or was part of, the scheme) was entered into that secured or achieved the result that:

(i) in a case to which subparagraph (ii) does not apply - at the relevant time, the taxable company was unable, having regard to other debts of the taxable company, to pay to the Commissioner all the company tax due and payable by the taxable company at the relevant time; or

(ii) if the taxable company ceased to exist before the relevant time - immediately before the taxable company ceased to exist, the taxable company would have been unable, having regard to other debts of the taxable company, to pay to the Commissioner all the company tax that would have been due and payable by the taxable company immediately before it ceased to exist if the company tax due and payable by the taxable company at the relevant time had been due and payable by the taxable company immediately before it ceased to exist; and

(j)  if the taxable company carried on a business immediately before the last sale time, not being a business that consisted only of deriving income from property - the taxable company did not continue to carry on that business after the last sale time,

the following provisions have effect:

(k)  if all the shares referred to in paragraph (a) were sold under the scheme by one person - a primary taxable amount equal to the overdue company tax shall be taken to exist at the relevant time in relation to that person;

(m)  if all the shares referred to in paragraph (a) were shares in the same company and paragraph (k) does not apply - a primary taxable amount shall be taken to exist at the relevant time in relation to each person who, as the holder or one of the joint holders of any of the shares referred to in paragraph (a), sold the shares, or his interest in the shares, as the case may be, under the scheme and that primary taxable amount is an amount ascertained in accordance with the formula

                                     OC 
                                     ---,
                                      S 

      

where:

O is the amount of the overdue company tax;

C is the number of whole dollars in the amount or value of the consideration paid or given in respect of the sale of the shares or interest by the person; and

S is the number of whole dollars in the amount or value of the total consideration paid or given in respect of the sale or sales under the scheme of all the shares referred to in paragraph (a); or

(n)  if the shares referred to in paragraph (a) were shares in 2 or more companies and paragraph (k) does not apply - a primary taxable amount shall be taken to exist at the relevant time in relation to each person who, as the holder or one of the joint holders of any of the shares referred to in paragraph (a) that were shares in a company (in this paragraph referred to as the ``prescribed company''), being the taxable company or another company that, immediately before the first sale time, was related to the taxable company, sold the shares, or his interest in the shares, as the case may be, under the scheme and that primary taxable amount is an amount ascertained in accordance with the formula

                                     OCN 
                                     ---,
                                     SW 

      

where:

O is the amount of the overdue company tax;

C is the number of whole dollars in the amount or value of the consideration paid or given in respect of the sale of the shares or interest by the person;

N is the number of whole dollars in:

(i) where the prescribed company is the taxable company - the value, immediately before the first sale time, of all the shares referred to in paragraph (a) that were shares in the taxable company; or

(ii) in any other case - the amount equal to so much of the value of the assets of the prescribed company immediately before the first sale time as was attributable to the net worth of the taxable company immediately before that time;

S is the number of whole dollars in the amount or value of the total consideration paid or given in respect of the sale or sales under the scheme of all the shares referred to in paragraph (a) that were shares in the prescribed company; and

W is the number of whole dollars in the net worth of the taxable company immediately before the first sale time.

5(3)  [Subsec (2) overrides]  

Where subsection (2) applies in relation to the sale of shares in a company, subsection (1) does not apply in relation to that sale.

5(4)  [Commissioner may waive tax]  

Where a primary taxable amount exists or existed in relation to a person in relation to an amount of company tax payable by a company and:

(a)  the Commissioner, having regard to:

(i) circumstances relating to the sale of the shares or the interest in shares to which the primary taxable amount relates;

(ii) circumstances, whether occurring before or after that sale, that caused or contributed to the failure of the company to pay that company tax; and

(iii) such other circumstances as the Commissioner considers relevant,

considers it unreasonable that the primary taxable amount should be taken to exist or to have existed in relation to the person; or

(b)  if the primary taxable amount is less than $100 - the Commissioner considers that the primary taxable amount should not be taken to exist or to have existed in relation to the person,

the primary taxable amount shall not be taken to exist or to have existed in relation to the person.

5(5)  [Sale by bare trustee]  

Subsections (1) and (2) do not apply in relation to the sale of shares or of an interest in shares by a person who was a bare trustee in respect of those shares or that interest but, where, but for this subsection and subsection (4), a primary taxable amount (in this subsection referred to as the ``trustee's taxable amount'') would exist in relation to the person at a particular time in relation to such a sale:

(a)  if there was only one beneficiary in the trust estate - a primary taxable amount equal to the trustee's taxable amount shall be taken to exist at that time in relation to the beneficiary; and

(b)  if there were 2 or more beneficiaries in the trust estate - a primary taxable amount shall be taken to exist at that time in relation to each of those beneficiaries and, in relation to each beneficiary, that primary taxable amount is an amount ascertained by multiplying the interest in the trust estate of the beneficiary concerned, expressed as a fraction of the aggregate of the interests in the trust estate of the beneficiaries, by the trustee's taxable amount.

5(6)  [Para (1)(c), (2)(c) - control of voting power]  

For the purposes of paragraphs (1)(c) and (2)(c), where:

(a)  under the scheme referred to in paragraph (1)(a) or (2)(a), as the case may be, a person sold all of his shares in a company; and

(b)  immediately before the time of sale of those shares, the person held an office in the company by virtue of which the person was capable of controlling any of the voting power in the company,

the person shall be deemed to have been capable of controlling that voting power immediately before the first sale time by virtue of rights attaching to those shares.

5(7)  [Para (1)(d), (2)(d) - assets and liabilities]  

For the purposes of the application of paragraphs (1)(d) and (2)(d) in relation to a sale or sales of shares under a scheme:

(a)  the total value of the assets of a company immediately before the last sale time shall, subject to subsection (8), be taken to be:

(i) where, for the purposes of the sale or sales of the shares under the scheme, it was agreed by the parties to the sale or to each of the sales that the assets of the company were to be taken to have a particular value - that value; and

(ii) in any other case - such amount as the Commissioner determines;

(b)  the total amount of the liabilities of a company immediately before the last sale time shall be taken to be:

(i) where, for the purposes of the sale or sales of the shares under the scheme, it was agreed by the parties to the sale or to each of the sales that the total amount of the liabilities of the company was to be taken to be a particular amount - that amount; and

(ii) in any other case - such amount as the Commissioner determines; and

(c)  the amount of the company tax liability of a company immediately before the last sale time shall be taken to be the aggregate of the following amounts:

(i) any amount of ordinary company tax or undistributed profits tax payable by the company immediately before the last sale time;

(ii) any amount of ordinary company tax (not including additional tax payable under section 207 of the Assessment Act) that, immediately before the last sale time, might reasonably have been expected to become payable by the company at a later time in relation to the year of income in which the last sale time occurred or a preceding year of income; and

(iii) any amount of undistributed profits tax (not including additional tax payable under section 207 of the Assessment Act) that, immediately before the last sale time, might reasonably have been expected to become payable by the company at a later time in relation to the year of income in which the last sale time occurred or a preceding year of income.

5(8)  [Para (7)(a) - assets not to be double-counted]  

The total value of the assets of a company at a particular time ascertained in accordance with paragraph (7)(a) for the purposes of the application of paragraph (2)(d) in relation to the company shall be reduced by an amount equal to so much of that total value as is attributable, by virtue of the beneficial ownership by the company of shares in another company that, for the purposes of that application of that paragraph, is one of the eligible companies referred to in that paragraph, to the value of the assets of that other company.

5(9)  [Subsec (7) - reasonable expectation that company tax payable]  

In determining for the purposes of subsection (7) whether, immediately before the last sale time in relation to a sale or sales of shares under a scheme, it might reasonably have been expected that ordinary company tax or undistributed profits tax would become payable by a company at a later time in relation to the year of income in which the last sale time occurred or a preceding year of income:

(a)  full knowledge of the affairs of the company shall be assumed to have existed;

(b)  it shall be assumed that the company would continue to exist;

(c)  in the case of the year of income in which the last sale time occurred, it shall be assumed that the ordinary company tax or the undistributed profits tax, as the case may be, payable by the company in relation to that year of income would be ascertained 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; and

(d)  it shall be assumed that the company would, after the last sale time, pay only those dividends (if any) that the company in fact paid after the last sale time.

5(10)  [Para (1)(f), (2)(f) - objection finalised]  

For the purposes of paragraphs (1)(f) and (2)(f), an objection against an assessment shall be taken to have been finalised if:

(a)  there is no proceeding that has been instituted in relation to the objection under Division 2 of Part V of the Assessment Act that has not been determined; and

(b)  the time for instituting proceedings under that Division in relation to the objection has expired.

5(11)  [Lapsed or terminated proceedings]  

For the purposes of paragraph (10)(a), any proceeding under Division 2 of Part V of the Assessment Act that has lapsed or otherwise been terminated shall be taken to have been determined.

5(12)  [Extension of time for instituting proceeding]  

For the purposes of paragraph (10)(b), the time for instituting a proceeding in relation to an objection under Division 2 of Part V of the Assessment Act shall not be taken not to have expired by reason only of the possibility that an extension of that time might be granted.

5(13)  [Para (2)(n) - related companies; net worth of company]  

For the purposes of the application of paragraph (2)(n) in relation to a sale or sales of shares under a scheme:

(a)  a company shall be taken to be related to another company immediately before the first sale time if, and only if, immediately before that time, a reduction in the value of any shares in the other company could reasonably be expected to result in the reduction of the value in the shares of the first-mentioned company; and

(b)  a reference to the net worth of a company immediately before the first sale time is a reference to the value of the assets of the company immediately before that time reduced by the total amount of the liabilities of the company immediately before that time.

5(14)  [Para (13)(b) - assets and liabilities]  

For the purposes of the application of paragraph (13)(b) in relation to a sale or sales of shares under a scheme:

(a)  the value of the assets of a company immediately before the first sale time shall be taken to be:

(i) where, for the purposes of the sale or sales of the shares under the scheme, it was agreed by the parties to the sale or to each of the sales that the assets of the company were to be taken to have a particular value - that value; and

(ii) in any other case - such amount as the Commissioner determines; and

(b)  the total amount of the liabilities of a company immediately before the first sale time shall be taken to be:

(i) where, for the purposes of the sale or sales of the shares under the scheme, it was agreed by the parties to the sale or to each of the sales that the total amount of the liabilities of the company was to be taken to be a particular amount - that amount; and

(ii) in any other case - such amount as the Commissioner determines.

5(15)  [``Arrangement or transaction'']  

In this section:

(a)  a reference to an arrangement or transaction includes a reference to both an arrangement and a transaction and to any series or combination of arrangements or transactions or arrangements and transactions; and

(b)  a reference to an arrangement includes a reference to an arrangement, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings.

5(16)  [Disappearance of company or trust estate]  

A primary taxable amount may be taken to exist at a particular time in relation to a company or the trustee of a trust estate notwithstanding that the company or trust estate has ceased to exist before that time.

SECTION 6  SECONDARY TAXABLE AMOUNTS  

6(1)  [Where company or trust estate disappears before assessment]  

Where:

(a)  at any time (in this subsection referred to as the ``relevant time'') a vendors taxable amount exists in relation to a company or in relation to a person in the capacity of trustee of a trust estate; and

(b)  at the relevant time, the company or the trust estate, as the case may be, no longer exists; and

(c)  an assessment of the recoupment tax payable on the vendors taxable amount was not made before that company or trust estate, as the case may be, ceased to exist,

a secondary taxable amount shall be taken to exist at the relevant time in relation to each person who, if there had been a distribution (in this subsection referred to as the ``capital distribution'') of capital of the company or of corpus of the trust estate, as the case may be, immediately before the relevant distribution time, of an amount equal to the distribution amount in relation to the vendors taxable amount, would have had a right, as a shareholder in the company or as a beneficiary in the trust estate, as the case may be, to receive the whole or a part of the capital distribution and, in relation to each such person, the secondary taxable amount is:

(d)  if only one person would have had such a right - an amount equal to the vendors taxable amount;

(e)  if 2 or more persons would have had such a right and paragraph (f) does not apply - an amount ascertained in accordance with the formula

                                   AB
                                   ---,
                                    C 

      

where:

A is the vendors taxable amount;

B is the number of whole dollars in the amount that the person concerned would have received in the event of the capital distribution being made; and

C is the number of whole dollars in the amount of the capital distribution; and

(f)  if 2 or more persons would have had such a right and the vendors taxable amount is a prescribed taxable amount by virtue of subsection (4), (5), (6), (8), (9) or (10) - such part of the vendors taxable amount as the Commissioner, having regard to the matters specified in subsection (16), determines.

6(2)  [Post-sale change in ownership of company or trust estate]  

Where:

(a)  at any time (in this subsection referred to as the ``relevant time'') a vendors taxable amount exists in relation to a company (in this subsection referred to as the ``relevant company'') or in relation to a person in the capacity of a trustee of a trust estate (in this subsection referred to as the ``relevant trust estate'') in relation to a sale of shares or of an interest in shares;

(b)  after the time of sale of the shares or interest referred to in paragraph (a) and before the relevant time:

(i) if the vendors taxable amount exists in relation to the relevant company:

(A) some or all of the shares in the relevant company were sold; or

(B) some or all of the shares in another company that, immediately before the time of sale of the shares or interest referred to in paragraph (a), was a holding company of the relevant company, were sold; or

(ii) if the vendors taxable amount exists in relation to the trustee of the relevant trust estate:

(A) any beneficial interest in the relevant trust estate was sold; or

(B) any beneficial interest in another trust estate that, immediately before the time of sale of the shares or interest referred to in paragraph (a) was a holding trust estate in relation to the relevant trust estate, was sold; and

(c)  the Commissioner is of the opinion that, by reason of a circumstance mentioned in paragraph (b), it would be unreasonable that the relevant company or the trustee of the relevant trust estate, as the case may be, be liable to pay recoupment tax on the vendors taxable amount,

the following provisions have effect:

(d)  a secondary taxable amount shall be taken to exist at the relevant time in relation to each person who, if there had been a distribution (in this subsection referred to as the ``capital distribution'') of capital of the relevant company or of corpus of the relevant trust estate, as the case may be, immediately before the relevant distribution time, of an amount equal to the distribution amount in relation to the vendors taxable amount, would have had a right, as a shareholder in the relevant company or as a beneficiary in the relevant trust estate, as the case may be, to receive the whole or a part of the capital distribution and, in relation to each such person, the secondary taxable amount is:

(i) if only one person would have had such a right - an amount equal to the vendors taxable amount;

(ii) if 2 or more persons would have had such a right and subparagraph (iii) does not apply - an amount ascertained in accordance with the formula

                                   AB
                                   ---,
                                    C 

        

where:

A is the vendors taxable amount;

B is the number of whole dollars in the amount that the person would have received in the event of the capital distribution being made; and

C is the number of whole dollars in the amount of the capital distribution; and

(iii) if 2 or more persons would have had such a right and the vendors taxable amount is a prescribed taxable amount by virtue of subsection (4), (5), (6), (8), (9) or (10) - such part of the vendors taxable amount as the Commissioner, having regard to the matters specified in subsection (16), determines; and

(e)  the relevant company or the trustee of the relevant trust estate, as the case may be, is not liable, and shall be deemed never to have been liable, to pay recoupment tax on the vendors taxable amount referred to in paragraph (a).

6(3)  [Where recoupment tax unlikely to be paid]  

Where at any time (in this subsection referred to as the ``relevant time''):

(a)  there remains unpaid an amount of recoupment tax payable on a vendors taxable amount by a company or a person in the capacity of trustee of a trust estate; and

(b)  the Commissioner is of the opinion that the recoupment tax, or part of the recoupment tax, is unlikely to be paid,

a secondary taxable amount shall be taken to exist at the relevant time in relation to each person who, if there had been a distribution (in this subsection referred to as the ``capital distribution'') of capital of the company or of corpus of the trust estate, as the case may be, immediately before the relevant distribution time of an amount equal to the distribution amount in relation to the vendors taxable amount, would have had a right, as a shareholder in the company or as a beneficiary in the trust estate, as the case may be, to receive the whole or a part of the capital distribution and, in relation to each such person, the secondary taxable amount is:

(c)  if only one person would have had such a right - an amount equal to the amount of the recoupment tax;

(d)  if 2 or more persons would have had such a right and paragraph (e) does not apply - an amount ascertained in accordance with the formula

                                   AB
                                   ---,
                                    C 

      

where:

A is the amount of the recoupment tax;

B is the number of whole dollars in the amount that the person concerned would have received in the event of the capital distribution being made; and

C is the number of whole dollars in the amount of the capital distribution; and

(e)  if 2 or more persons would have had such a right and the vendors taxable amount is a prescribed taxable amount by virtue of subsection (4), (5), (6), (8), (9) or (10) - such part of the amount of the recoupment tax as the Commissioner, having regard to the matters specified in subsection (16), determines.

6(4)  [Where shareholder receives formal distribution of capital]  

For the purposes of the application of subsection (1), (2) or (3) in relation to:

(a)  a vendors taxable amount that exists in relation to a company; or

(b)  recoupment tax payable by a company on a vendors taxable amount,

at a particular time (in this subsection referred to as the ``relevant time''), where, after the sale of the shares or interest in shares to which the vendors taxable amount relates and before the relevant time, a person, as a shareholder in the company, received the whole or any part of a distribution of capital of the company on the winding-up of the company or a reduction of capital of the company, the vendors taxable amount is a prescribed taxable amount for the purposes of this section and that person shall be deemed to be a person who, if there had been a distribution of capital of the company immediately before the relevant distribution time, would have had a right, as a shareholder in the company, to receive part of the distribution of capital (whether or not the person or the company existed immediately before the sale of the shares or interest).

6(5)  [Where person receives property from company primarily liable]  

For the purposes of the application of subsection (1), (2) or (3) in relation to a company (in this subsection referred to as the ``relevant company'') in relation to a sale or sales of shares (in this subsection referred to as the ``original shares'') under a scheme in relation to:

(a)  a primary taxable amount that exists in relation to the relevant company; or

(b)  recoupment tax payable by the relevant company on a primary taxable amount,

at a particular time (in this subsection referred to as the ``relevant time''), where:

(c)  the following conditions are satisfied:

(i) before the relevant time and under a scheme, whether entered into in Australia or outside Australiaand whether entered into before or after the commencement of this Act, property of the relevant company was transferred to a person (in this subsection referred to as the ``transferee'') by way of loan and:

(A) after the transfer, a person (in this subsection referred to as the ``recipient'') or persons (in this subsection referred to as the ``recipients''), whether or not that person was or those persons included the transferee, acquired (whether or not for consideration), as assignee or assignees of rights under the agreement relating to the making of the loan, the right to recover from the transferee the whole or a part of the loan; or

(B) the person to whom the loan was or is to be repaid has released or abandoned, or may reasonably be expected to release, abandon or fail to demand repayment of, the loan or a part of the loan; and

(ii) the Commissioner is of the opinion that the transfer of property referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the relevant company;

(d)  the following conditions are satisfied:

(i) before the relevant time, the relevant company:

(A) as settlor of a trust, transferred property to the trustee of a trust estate (in this subsection referred to as the ``recipient trust estate''); or

(B) otherwise than as settlor, transferred property by way of gift to the trustee of a trust estate (in this subsection also referred to as the ``recipient trust estate'');

(ii) at the time of the transfer referred to in subparagraph (i), the relevant company or an associate of the relevant company was a beneficiary of the recipient trust estate or could have become a beneficiary of the recipient trust estate by the exercise of a power of appointment by the trustee of the recipient trust estate or another person; and

(iii) the Commissioner is of the opinion that the transfer of property referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the relevant company; or

(e)  the following conditions are satisfied:

(i) before the relevant time, the relevant company acquired redeemable shares in another company (in this subsection also referred to as the ``recipient'') or acquired redeemable units in a unit trust (in this subsection referred to as the ``recipient unit trust'');

(ii) the redemption value of the redeemable shares or of the redeemable units, as the case may be, is less than the amount or value of the consideration paid or given by the relevant company in respect of the acquisition of the redeemable shares or the redeemable units, as the case may be; and

(iii) the Commissioner is of the opinion that the acquisition referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the relevant company,

the primary taxable amount is a prescribed taxable amount for the purposes of this section and:

(f)  in a case to which sub-subparagraph (c)(i)(A) applies - the recipient or each of the recipients, as the case may be, referred to in that sub-subparagraph;

(g)  in a case to which sub-subparagraph (c)(i)(B) applies - the transferee referred to in subparagraph (c)(i);

(h)  in a case to which paragraph (d) applies - the trustee of the recipient trust estate referred to in that paragraph; or

(j)  in a case to which paragraph (e) applies - the recipient or the trustee of the recipient unit trust, as the case may be, referred to in that paragraph,

shall be deemed to be a person who, if there had been a distribution of capital of the relevant company immediately before the relevant distribution time, would have had a right, as a shareholder in the relevant company, to receive part of the distribution.

6(6)  [Where person acquires company property received from trust corpus or other company]  

For the purposes of the application of subsection (1), (2) or (3) in relation to a company (in this subsection referred to as the ``relevant company'') in relation to:

(a)  a vendors taxable amount (in this subsection referred to as the ``relevant vendors taxable amount'') that exists in relation to the relevant company; or

(b)  recoupment tax payable by the relevant company on a vendors taxable amount (in this subsection also referred to as the ``relevant vendors taxable amount''),

at a particular time (in this subsection referred to as the ``relevant time''), where:

(c)  before the relevant time and under a scheme, whether entered into in Australia or outside Australia and whether entered into before or after the commencement of this Act:

(i) any corpus of a trust estate was paid to, or applied for the benefit of, the relevant company or the relevant company received a distribution of capital of another company on a winding-up or reduction of capital of the other company; and

(ii) a person (in this subsection referred to as the ``recipient'') acquired property from the relevant company (otherwise than by way of a distribution of capital to the person as a shareholder), whether by loan or otherwise, whether or not for consideration and whether before or after the payment or application, or the receipt, as the case may be, referred to in subparagraph (i);

(d)  the relevant vendors taxable amount was ascertained by reference to, or to recoupment tax on, a vendors taxable amount that existed in relation to the trustee of the trust estate, or the other company, as the case may be, referred to in subparagraph (c)(i); and

(e)  the Commissioner is of the opinion that the acquisition of property by the recipient would not have occurred unless the payment or application of the corpus of the trust estate, or the distribution of capital of the other company, as the case may be, referred to in subparagraph (c)(i) had been made, or was to be made, as the case may be, under the scheme,

the relevant vendors taxable amount is a prescribed taxable amount for the purposes of this section and the recipient shall be deemed to be a person who, if there had been a distribution of capital of the relevant company immediately before the relevant distribution time, would have had a right, as a shareholder in the relevant company, to receive part of the distribution of capital.

6(7)  [Acquisition under subsec (6) a deemed distribution of capital]  

Where subsection (6) applies in relation to the acquisition of property by a person from a company, that acquisition of property shall, for the purposes of any other application of subsection (6) and any application of subsection (10), be deemed to be a distribution of capital of the company received by that person at the time when the property was acquired.

6(8)  [Where beneficiary receives distribution of trust corpus]  

For the purposes of the application of subsection (1), (2) or (3) in relation to:

(a)  a vendors taxable amount that exists in relation to the trustee of a trust estate; or

(b)  recoupment tax payable by the trustee of a trust estate on a vendors taxable amount,

at a particular time (in this subsection referred to as the ``relevant time''), where, after the sale of the shares or interest in shares to which the eligible taxable amount relates and before the relevant time, any of the corpus of the trust estate was paid to, or applied for the benefit of, a person as a beneficiary in the trust estate, the vendors taxable amount is a prescribed taxable amount for the purposes of this section and the person shall be deemed to be a person who, if there had been a distribution of corpus of the trust estate immediately before the relevant distribution time, would have had a right, as a beneficiary in the trust estate, to receive the whole or a part of the distribution.

6(9)  [Where person receives property from trust estate primarily liable]  

For the purposes of the application of subsection (1), (2) or (3) in relation to the trustee of a trust estate (in this subsection referred to as the ``relevant trust estate'') in relation to a sale or sales of shares (in this subsection referred to as the ``original shares'') under a scheme in relation to:

(a)  a primary taxable amount that exists in relation to the trustee of the relevant trust estate; or

(b)  recoupment tax payable by the trustee of the relevant trust estate on a primary taxable amount,

at a particular time (in this subsection referred to as the ``relevant time''), where:

(c)  the following conditions are satisfied:

(i) before the relevant time and under a scheme, whether entered into in Australia or outside Australia and whether entered into before or after the commencement of this Act, property of the relevant trust estate was transferred to a person (in this subsection referred to as the ``transferee'') by way of loan and:

(A) after the transfer a person (in this subsection referred to as the ``recipient'') or persons (in this subsection referred to as the ``recipients''), whether or not that person was or those persons included the transferee, acquired (whether or not for consideration), as assignee or assignees of rights under the agreement relating to the making of the loan, the right to recover from the transferee the whole or a part of the loan; or

(B) the person to whom the loan was, or is, to be repaid has released or abandoned, or may reasonably be expected to release, abandon or fail to demand repayment of, the loan or a part of the loan; and

(ii) the Commissioner is of the opinion that the transfer of property referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the trustee of the relevant trust estate;

(d)  the following conditions are satisfied:

(i) before the relevant time, the trustee of the relevant trust estate:

(A) as settlor of a trust, transferred property of the relevant trust estate to the trustee of another trust estate (in this subsection referred to as the ``recipient trust estate''); or

(B) otherwise than as settlor, transferred property of the relevant trust estate by way of gift to the trustee of another trust estate (in this subsection also referred to as the ``recipient trust estate'');

(ii) at the time of the transfer referred to in subparagraph (i), a beneficiary of the relevant trust estate or an associate of a beneficiary of the relevant trust estate was a beneficiary of the recipient trust estate or could have become a beneficiary of the recipient trust estate by the exercise of a power of appointment by the trustee of the recipient trust estate or another person; and

(iii) the Commissioner is of the opinion that the transfer of property referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the trustee of the relevant trust estate or another person; or

(e)  the following conditions are satisfied:

(i) before the relevant time, the trustee of the relevant trust estate acquired redeemable shares in a company (in this subsection also referred to as the ``recipient'') or acquired redeemable units in a unit trust (in this subsection referred to as the ``recipient unit trust'');

(ii) the redemption value of the redeemable shares or of the redeemable units, as the case may be, is less than the amount or value of the consideration paid or given by the trustee of the relevant trust estate in respect of the acquisition of the redeemable shares or the redeemable units, as the case may be; and

(iii) the Commissioner is of the opinion that the acquisition referred to in subparagraph (i) would not have occurred if the original shares had not been sold by the trustee of the relevant trust estate,

the primary taxable amount is a prescribed taxable amount for the purposes of this section and:

(f)  in a case to which sub-subparagraph (c)(i)(A) applies - the recipient or each of the recipients, as the case may be, referred to in that sub-subparagraph;

(g)  in a case to which sub-subparagraph (c)(i)(B) applies - the transferee referred to in subparagraph (c)(i);

(h)  in a case to which paragraph (d) applies - the trustee of the recipient trust estate referred to in that paragraph; or

(j)  in a case to which paragraph (e) applies - the recipient or the trustee of the recipient unit trust, as the case may be, referred to in that paragraph,

shall be deemed to be a person who, if there had been a distribution of corpus of the relevant trust estate immediately before the relevant distribution time, would have had a right, as a beneficiary in the relevant trust estate, to receive part of the distribution.

6(10)  [Where person acquires trust property received from company or other trust estate]  

For the purposes of the application of subsection (1), (2) or (3) in relation to the trustee of a trust estate (in this subsection referred to as the ``relevant trust estate'') in relation to:

(a)  a vendors taxable amount (in this subsection referred to as the ``relevant vendors taxable amount'') that exists in relation to the trustee of the relevant trust estate; or

(b)  recoupment tax payable by the trustee of the relevant trust estate on a vendors taxable amount (in this subsection also referred to as the ``relevant vendors taxable amount''),

at a particular time (in this subsection referred to as the ``relevant time''), where:

(c)  before the relevant time and under a scheme, whether entered into in Australia or outside Australia and whether entered into before or after the commencement of this Act:

(i) any corpus of another trust estate was paid to, or applied for the benefit of, the trustee of the relevant trust estate or the trustee of the relevant trust estate received a distribution of capital of a company on a winding-up or reduction of capital of the company; and

(ii) a person (in this subsection referred to as the ``recipient'') acquired property of the relevant trust estate (otherwise than by way of a distribution of corpus to the person as a beneficiary in the relevant trust estate), whether by loan or otherwise, whether or not for consideration and whether before or after the payment or application, or the receipt, as the case may be, referred to in subparagraph (i);

(d)  the relevant vendors taxable amount was ascertained by reference to, or to recoupment tax on, a vendors taxable amount that existed in relation to the trustee of the other trust estate, or the company, as the case may be, referred to in subparagraph (c)(i); and

(e)  the Commissioner is of the opinion that the acquisition of property by the recipient would not have occurred unless the payment or application of the corpus of the other trust estate, or the distribution of capital of the company, as the case may be, referred to in subparagraph (c)(i) had been made, or was to be made, as the case may be, under the scheme,

the relevant vendors taxable amount is a prescribed taxable amount for the purposes of this section and the recipient shall be deemed to be a person who, if there had been a distribution of corpus of the relevant trust estate immediately before the relevant distribution time, would have had a right, as a beneficiary in the relevant trust estate, to receive the whole or a part of the distribution.

6(11)  [Acquisition under subsec (10) a deemed distribution of corpus]  

Where subsection (10) applies in relation to the acquisition by a person of property of a trust estate, that acquisition of property shall, for the purposes of any application of subsection (6) and any other application of subsection (10), be deemed to be a distribution of corpus of the trust estate received by that person, as a beneficiary in the trust estate, at the time when the property was acquired.

6(12)  [``Distribution amount'']  

For the purposes of this section, the distribution amount in relation to a vendors taxable amount is:

(a)  if the vendors taxable amount is a primary taxable amount - the consideration paid or given in respect of the sale of the shares or the interest in shares to which the primary taxable amount relates; and

(b)  if the vendors taxable amount is a secondary taxable amount - an amount that bears to the amount that is the distribution amount in relation to the vendors taxable amount by reference to which, or to recoupment tax on which, the secondary taxable amount was ascertained the same proportion as the secondary taxable amount bears to that vendors taxable amount or that recoupment tax, as the case may be.

6(13)  [``Relevant distribution time'']  

For the purposes of this section, the relevant distribution time in relation to a vendors taxable amount that exists in relation to a company or the trustee of a trust estateis:

(a)  if the company or trust estate did not exist at the time of sale of the shares or interest in shares to which the vendors taxable amount relates - the time when the company or trust estate commenced to exist; or

(b)  in any other case - the time of sale of the shares or interest in shares to which the primary taxable amount relates,

or, if the Commissioner is of the opinion that that time is inappropriate, such later time as the Commissioner determines.

6(14)  [``Holding company'', ``holding trust estate'']  

For the purposes of this section:

(a)  a company is a holding company of another company at a particular time if the company has a controlling interest in the other company at that time; and

(b)  a trust estate is a holding trust estate in relation to another trust estate at a particular time if the trustee of the first-mentioned trust estate has a beneficial interest in the other trust estate at that time.

6(15)  [Deemed controlling interest, beneficial interest]  

For the purposes of subsection (14):

(a)  where a company has a controlling interest in a second company that has a controlling interest in a third company (including a controlling interest that the second company has in the third company by another application or other applications of this paragraph), the first-mentioned company shall be deemed to have a controlling interest in the third company; and

(b)  where the trustee of a trust estate has a beneficial interest in a second trust estate and the trustee of the second trust estate has a beneficial interest in a third trust estate (including a beneficial interest that the trustee of the second trust estate has in the third trust estate by another application or other applications of this paragraph), the trustee of the first-mentioned trust estate shall be deemed to have a beneficial interest in the third trust estate.

6(16)  [Matters to which Commissioner to have regard]  

In determining, in accordance with paragraph (1)(f), subparagraph (2)(d)(iii) or paragraph (3)(e), the amount of the secondary taxable amount that is to be taken to exist in relation to each of 2 or more persons by the application of subsection (1), (2) or (3), as the case may be, in relation to a vendors taxable amount that exists in relation to a company or the trustee of a trust estate, the Commissioner shall have regard to:

(a)  the rights (if any) that any of those persons would, but for subsections (4), (5), (6), (8), (9) and (10), have had in respect of the capital distribution referred to in subsection (1), (2) or (3), as the case may be;

(b)  the amount of any distribution of capital of the company or of corpus of the trust estate, as the case may be, to which subsection (4) or (8) applies in relation to any of those persons in relation to the vendors taxable amount;

(c)  the amount or value of any property acquired by any of those persons from the company or trust estate, as the case may be, being property to which paragraph (5)(c) or (d), subsection (6), paragraph (9)(c) or (d) or subsection (10) applies in relation to the person concerned in relation to the vendors taxable amount;

(d)  the consideration paid or given in respect of the acquisition by the company or the trustee of the trust estate of redeemable shares or redeemable units from any of those persons, being redeemable shares or redeemable units to which paragraph (5)(e) or (9)(e) applies in relation to the person concerned in relation to the vendors taxable amount, and the redemption value of those redeemable shares or redeemable units; and

(e)  such other matters as the Commissioner considers relevant.

6(17)  [Redeemable shares and units]  

For the purposes of subsections (5) and (9):

(a)  ``redemption value'', in relation to redeemable shares or redeemable units means:

(i) if the redeemableshares or the redeemable units, as the case may be, have been redeemed - the amount for which they were redeemed; and

(ii) in any other case - the amount that, in the opinion of the Commissioner, might reasonably be expected to be the amount for which the redeemable shares or the redeemable units, as the case may be, would be redeemed if they were redeemed at the relevant time referred to in subsection (5) or (9), as the case may be;

(b)  a share in a company is a redeemable share if:

(i) the share is, or at the option of the company is to be, liable to be redeemed; or

(ii) the share was issued in pursuance of, or as part of, an agreement or arrangement, whether oral or in writing and whether entered into before or after the commencement of this Act, that had the purpose, or purposes that included the purpose, of enabling the company, by means of the redemption, purchase or cancellation, or of a reduction in the paid-up value, of that share or of any other share in the company, to pay, transfer or apply to, on behalf of or at the direction of the person to whom the share was issued or any other person, whether upon the exercise of an option by the company or by any other person or not, any money or other property other than shares in the company;

(c)  a unit in a unit trust is a redeemable unit if:

(i) the unit is, or at the option of the trustee of the unit trust is to be, liable to be redeemed; or

(ii) the unit was issued in pursuance of, or as part of, an agreement or arrangement, whether oral or in writing and whether entered into before or after the commencement of this Act, that had the purpose, or purposes that included the purpose, of enabling the trustee of the unit trust, by means of the redemption, purchase or cancellation of the unit or of any other unit in the unit trust or of a distribution of corpus of the unit trust, to pay, transfer or apply to, on behalf of or at the direction of the person to whom the unit was issued or any other person, whether upon the exercise of an option by the trustee of the unit trust or by any other person or not, any money or other property other than units in the unit trust;

(d)  a person to whom redeemable shares or redeemable units were issued or allotted shall be taken to have acquired those redeemable shares or redeemable units; and

(e)  a reference to the consideration paid or given by a person in respect of the acquisition of redeemable shares in a company or redeemable units in a unit trust includes a reference to any payment or other consideration given by the person to the company or to the trustee of the unit trust, as the case may be, in respect of the redeemable shares or redeemable units, whether as payment of a premium in respect of the redeemable shares or redeemable units or otherwise and whether on application for, or on allotment of, the redeemable shares or redeemable units or otherwise.

6(18)  [Commissioner may waive tax]  

Where a secondary taxable amount exists or existed in relation to a person and:

(a)  the Commissioner, having regard to:

(i) the circumstances by reason of which the secondary taxable amount exists or existed; and

(ii) such other circumstances as the Commissioner considers relevant,

considers it unreasonable that the secondary taxable amount should be taken to exist or to have existed in relation to the person; or

(b)  if the secondary taxable amount is less than $100 - the Commissioner considers that the secondary taxable amount should not be taken to exist or to have existed in relation to the person,

the secondary taxable amount shall not be taken to exist or to have existed in relation to the person.

6(19)  [Disappearance of company or trust estate]  

A secondary taxable amount may be taken to exist at a particular time in relation to a company or the trustee of a trust estate notwithstanding that the company or trust estate has ceased to exist before that time.

6(20)  [Distribution of capital of company]  

For the purposes of this section, a distribution of capital of a company shall be taken to have been received by a person although it is not actually paid over to the person but is re-invested, accumulated, capitalised, carried to any reserve, sinking fund or insurance fund however designated, or otherwise dealt with on behalf of the person or as the person directs.

6(21)  [``Recoupment tax'']  

In this section, unless the contrary intention appears, ``recoupment tax'' includes late payment tax.

SECTION 7  PROMOTERS TAXABLE AMOUNTS  

7(1)  [Purchase of shares in taxable company]  

Where:

(a)  under a scheme entered into, whether in Australia or outside Australia, on or after 1 January 1972 and before 4 December 1980, some or all of the shares in a company were purchased;

(b)  the purchase or purchases of the shares referred to in paragraph (a) occurred before the commencement of this Act;

(c)  immediately after the last purchase time, the person or persons who purchased the shares referred to in paragraph (a) was or were, by virtue of rights attaching to the shares, capable of controlling more than 90% of the voting power in the company;

(d)  an assessment of ordinary company tax or undistributed profits tax has been made under the Assessment Act, whether before or after the commencement of this Act, in relation to the company in relation to a year of income (in this subsection referred to as the ``relevant year of income''), being the year of income in which the last purchase time occurred or a preceding year of income;

(e)  the period for objecting against the assessment has expired and any objection against the assessment has been finalised;

(f)  at any time (in this subsection referred to as the ``relevant time'') after the commencement of this Act, there remains unpaid an amount (in this subsection referred to as the ``overdue company tax'') of ordinary company tax or undistributed profits tax, as the case may be, due and payable by the company in relation to the relevant year of income;

(g)  before the relevant time, an arrangement or transaction (whether or not the arrangement or transaction was, or was part of, the scheme) was entered into that secured or achieved the result that:

(i) in a case to which subparagraph (ii) does not apply - at the relevant time, the company was unable, having regard to other debts of the company, to pay to the Commissioner all the company tax due and payable by the company at the relevant time; or

(ii) if the company ceased to exist before the relevant time - immediately before the company ceased to exist, the company would have been unable, having regard to other debts of the company, to pay to the Commissioner all the company tax that would have been due and payable by the company immediately before it ceased to exist if the company tax due and payable by the company at the relevant time had been due and payable by the company immediately before it ceased to exist; and

(h)  if the company carried on a business immediately before the last purchase time, not being a business that consisted only of deriving income from property - the company did not continue to carry on that business after the last purchase time,

a promoters taxable amount equal to:

(j)  in a case to which paragraph (k) does not apply - 20% of the overdue company tax; or

(k)  where:

(i) no vendors recoupment tax has become payable, and the Commissioner is of the opinion that no vendors recoupment tax will become payable, in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income; and

(ii) neither paragraph 5(4)(b) nor paragraph 6(18)(b) applied or, in the opinion of the Commissioner, will apply in relation to a vendors taxable amount in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income,

the overdue company tax,

shall be taken to exist at the relevant time in relation to the eligible promoters class.

7(2)  [Purchase of controlling interest in two or more companies]  

Where:

(a)  under a scheme entered into, whether in Australia or outside Australia, on or after 1 January 1972 and before 4 December 1980, some or all of the shares in one or more companies were purchased;

(b)  the purchase or purchases of the shares referred to in paragraph (a) occurred before the commencement of this Act;

(c)  immediately after the last purchase time, the person or persons who purchased the shares referred to in paragraph (a) was or were, by virtue of rights attaching to the shares, capable of controlling, either directly or through one or more interposed companies, trustees or partnerships, more than 90% of the voting power in each of 2 or more companies (in this subsection referred to as the ``eligible companies'');

(d)  an assessment of ordinary company tax or undistributed profits tax has been made under the Assessment Act, whether before or after the commencement of this Act, in relation to a company (in this subsection referred to as the ``taxable company''), being one of the eligible companies, in relation to a year of income (in this subsection referred to as the ``relevant year of income'') being the year of income in which the last purchase time occurred or a preceding year of income;

(e)  the period for objecting against the assessment has expired and any objection against the assessment has been finalised;

(f)  at any time (in this subsection referred to as the ``relevant time'') after the commencement of this Act, there remains unpaid an amount (in this subsection referred to as the ``overdue company tax'') of ordinary company tax or undistributed profits tax, as the case may be, due and payable by the taxable company in relation to the relevant year of income;

(g)  before the relevant time, an arrangement or transaction (whether or not the arrangement or transaction was, or was part of, the scheme) was entered into that secured or achieved the result that:

(i) in a case to which subparagraph (ii) does not apply - at the relevant time, the taxable company was unable, having regard to other debts of the taxable company, to pay to the Commissioner all the company tax due and payable by the taxable company at the relevant time; or

(ii) if the taxable company ceased to exist before the relevant time - immediately before the taxable company ceased to exist, the taxable company would have been unable, having regard to other debts of the taxable company, to pay to the Commissioner all the company tax that would have been due and payable by the taxable company immediately before it ceased to exist if the company tax due and payable by the taxable company at the relevant time had been due and payable by the taxable company immediately before it ceased to exist; and

(h)  if the taxable company carried on a business immediately before the last purchase time, not being a business that consisted only of deriving income from property - the taxable company did not continue to carry on that business after the last purchase time,

a promoters taxable amount equal to:

(j)  in a case to which paragraph (k) does not apply - 20% of the overdue company tax; and

(k)  where:

(i) no vendors recoupment tax has become payable and the Commissioner is of the opinion that no vendors recoupment tax will become payable, in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the taxable company in relation to the relevant year of income; and

(ii) neither paragraph 5(4)(b) nor paragraph 6(18)(b) applied or, in the opinion of the Commissioner, will apply in relation to a vendors taxable amount in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the taxable company in relation to the relevant year of income,

the overdue company tax,

shall be taken to exist at the relevant time in relation to the eligible promoters class.

7(3)  [Maximum promoters taxable amount]  

The promoters taxable amount, or the aggregate of the promoters taxable amounts, as the case may be, that exist by the application of subsection (1) or (2) in relation to a purchase or purchases of shares under a scheme shall not exceed:

(a)  in a case to which subsection (1) applies - the amount calculated in accordance with the formula A - L - T - C, where:

A is the total value, immediately before the last purchase time, of the assets of the company referred to in paragraph (1)(a);

L is the total amount of the liabilities of the company immediately before the last purchase time;

T is the amount of any company tax that was payable by the company in relation to the year of income in which the last purchase time occurred or a preceding year of income and was paid after the last purchase time and before 25 July 1982; and

C is the number of whole dollars in the amount or value of the total consideration paid or given in respect of the purchase or purchases under the scheme of all the shares referred to in paragraph (1)(a); or

(b)  in a case to which subsection (2) applies - the amount calculated in accordance with the formula A - L - T - C, where:

A is the aggregate of the total values, immediately before the last purchase time, of the assets of the eligible companies referred to in paragraph (2)(c);

L is the aggregate of the total amounts of the liabilities of those companies immediately before the last purchase time;

T is the aggregate of the amounts of company tax that were payable by those companies in relation to the year of income in which the last purchase time occurred or a preceding year of income and were paid after the last purchase time and before 25 July 1982; and

C is the number of whole dollars in the amount or value of the total consideration paid or given in respect of the purchase or purchases under the scheme of all the shares referred to in paragraph (2)(a).

7(4)  [Subsec (3) - assets and liabilities]  

For the purpose of the application of subsection (3) in relation to the purchase or purchases of shares under a scheme:

(a)  the total value of the assets of a company immediately before the last purchase time shall, subject to subsection (6), be taken to be:

(i) where, for the purposes of the purchase or purchases of the shares under the scheme, it was agreed by the parties to the purchase or to each of the purchases that the assets of the company were to be taken to have a particular value - that value; and

(ii) in any other case - such amount as the Commissioner determines; and

(b)  the total amount of the liabilities of a company immediately before the last purchase time shall be taken to be:

(i) where, for the purposes of the purchase or purchases of the shares under the scheme, it was agreed by the parties to the purchase or to each of the purchases that the total amount of the liabilities of the company was to be taken to be a particular amount - that amount; and

(ii) in any other case - such amount as the Commissioner determines.

7(5)  [Company tax excluded]  

In subsections (3) and (4), ``liabilities'' does not include liabilities in respect of company tax.

7(6)  [Para (4)(a) - assets not to be double-counted]  

The total value of the assets of a company at a particular time ascertained in accordance with paragraph (4)(a) for the purposes of the application of paragraph (3)(b) in relation to the company shall be reduced by an amount equal to so much of that total value as is attributable, by virtue of the beneficial ownership by the company of shares in another company that, for the purposes of that application of that paragraph, is one of the eligible companies referred to in that paragraph, to the value of the assets of that other company.

7(7)  [Subsec (2) overriding]  

Where subsection (2) applies in relation to the purchase of shares in a company, subsection (1) does not apply in relation to that purchase.

7(8)  [Eligible promoters class]  

For the purposes of the application of subsection (1) or (2) in relation to the purchase of shares under a scheme, the following persons constitute the eligible promoters class:

(a)  each person who purchased any of the shares (in this subsection referred to as the ``relevant shares'') referred to in paragraph (1)(a) or (2)(a), as the case may be;

(b)  each person who, in relation to the purchase of any of the relevant shares, acted as agent for the purchaser or acted as broker;

(c)  each person who:

(i) was an associate of a person who purchased any of the relevant shares at the time of the purchase of those shares; and

(ii) as part of, or in connection with, the scheme under which the relevant shares were purchased, gave, either directly or indirectly, financial assistance for the purpose of, or in connection with, the purchase by the person referred to in subparagraph (i) of any of the relevant shares;

(d)  where any of the relevant shares were purchased by a company - each person who, at the time of purchase of those shares by the company or at the time when the arrangement or transaction referred to in paragraph (1)(g) or (2)(g), as the case may be, was entered into, was a shareholder in, or a director of, the company;

(e)  where any of the relevant shares were purchased by a person (whether or not a company) in the capacity of trustee of a trust estate - each person who, at the time of purchase of those shares by the trustee or at the time when the arrangement or transaction referred to in paragraph (1)(g) or (2)(g), as the case may be, was entered into, was a beneficiary in the trust estate;

(f)  where any of the relevant shares were purchased by a company in the capacity of trustee of a trust estate - each person who, at the time of purchase of those shares by the company or at the time when the arrangement or transaction referred to in paragraph (1)(g) or (2)(g), as the case may be, was entered into, was a director of the company; and

(g)  where a person, being a company or the trustee of a trust estate, is included in the eligible promoters class by the application of paragraph (b), (c), (d), (e) or (f), or by another application of this paragraph, in relation to the purchase of any of the relevant shares by another person - each person who would be included in the eligible promoters class by the application of paragraph (d), (e) or (f) if the company or the trustee of the trust estate had purchased the shares:

(i) in a case to which subparagraph (ii) does not apply - at the time when the shares were purchased by the other person; and

(ii) if the company or the trust estate did not exist at the time when the shares were purchased by the other person - at the time when the company or trust estate commenced to exist.

7(9)  [Recipient of company funds deemed shareholder]  

For the purposes of ascertaining the persons who at any time (in this subsection referred to as the ``relevant time'') constitute the eligible promoters class for the purposes of the application of subsection (1) or (2) in relation to the purchase of shares under a scheme, where:

(a)  a company is included in the eligible promoters class by reason of the purchase by the company or by another person of any of the shares referred to in paragraph (1)(a) or (2)(a), as the case may be;

(b)  after the purchase of those shares and before the relevant time, the company paid an amount by way of advance or loan to, or made any payment on behalf of, or for the benefit of, a person (in this subsection referred to as the ``recipient''); and

(c)  having regard to:

(i) circumstances relating to the making of the advance, loan or payment, as the case may be;

(ii) the likelihood of the advance, loan or payment, as the case may be, not being repaid to the company; and

(iii) any other relevant circumstances,

it would be reasonable to conclude that the advance, loan or payment, as the case may be, represented a distribution of income or capital of the company to the recipient,

the recipient shall be deemed to have been a shareholder in the company at the time when the shares were purchased by the company or the other person, as the case may be.

7(10)  [Recipient of trust funds deemed beneficiary]  

For the purposes of ascertaining the persons who at any time (in this subsection referred to as the ``relevant time'') constitute the eligible promoters class for the purposes of the application of subsection (1) or (2) in relation to the purchase of shares under a scheme, where:

(a)  the trustee of a trust estate is included in the eligible promoters class by reason of the purchase by the trustee or by another person of any of the shares referred to in paragraph (1)(a) or (2)(a), as the case may be;

(b)  after the purchase of those shares and before the relevant time, the trustee paid an amount by way of advance or loan to, or made any payment on behalf of, or for the benefit of, a person (in this subsection referred to as the ``recipient''); and

(c)  having regard to:

(i) circumstances relating to the making of the advance, loan or payment, as the case may be;

(ii) the likelihood of the advance, loan or payment, as the case may be, not being repaid to the trustee; and

(iii) any other relevant circumstances,

it would be reasonable to conclude that the advance, loan or payment, as the case may be, represented a distribution of income or corpus of the trust estate to the recipient,

the recipient shall be deemed to have been a beneficiary in the trust estate at the time when the shares were purchased by the trustee or the other person, as the case may be.

7(11)  [Para (1)(c), (2)(c) - control of voting power]  

For the purposes of paragraphs (1)(c) and (2)(c), where:

(a)  under the scheme referred to in paragraph (1)(a) or (2)(a), as the case may be, a person purchased some or all of the shares in a company; and

(b)  immediately after the last purchase time in relation to the scheme, the person held an office in the company by virtue of which the person was capable of controlling any of the voting power in the company,

the person shall be deemed to have been capable of controlling that voting power immediately after the last purchase time in relation to the scheme by virtue of rights attaching to those shares.

7(12)  [Para (1)(e), (2)(e) - objection finalised]  

For the purposes of paragraphs (1)(e) and (2)(e), an objection against an assessment shall be taken to have been finalised if:

(a)  there is no proceeding that has been instituted in relation to the objection under Division 2 of Part V of the Assessment Act that has not been determined; and

(b)  the time for instituting proceedings under that Division in relation to the objection has expired.

7(13)  [Lapsed or terminated proceedings]  

For the purposes of paragraph (12)(a), any proceeding under Division 2 of Part V of the Assessment Act that has lapsed or otherwise been terminated shall be taken to have been determined.

7(14)  [Extension of time for instituting proceedings]  

For the purposes of paragraph (12)(b), the time for instituting a proceeding in relation to an objection under Division 2 of Part V of the Assessment Act shall not be taken not to have expired by reason only of the possibility that an extension of that time might be granted.

7(15)  [Subpara (8)(c)(ii) - ``financial assistance'']  

A reference in subparagraph (8)(c)(ii) to the giving of financial assistance includes a reference to the giving of financial assistance by means of the making of a loan, the giving of a guarantee, the provision of security, the release of an obligation or the forgiving of a debt or otherwise.

7(16)  [Disappearance of company or trust estate]  

For the purposes of this section, where a company that has ceased to exist or the trustee of a trust estate that has ceased to exist would be included in the eligible promoters class in relation to a promoters taxable amount if the company or the trust estate, as the case may be, had not ceased to exist, the company or the trustee of the trust estate shall be taken to be included in that eligible promoters class for the purposes of ascertaining whether other persons are included in that eligible promoters class.

7(17)  [``Arrangement or transaction'']  

In this section:

(a)  a reference to an arrangement or transaction includes a reference to both an arrangement and a transaction and to any series or combination of arrangements or transactions or arrangements and transactions; and

(b)  a reference to an arrangement includes a reference to an arrangement, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings.

7(18)  [``Shareholder'']  

In this section, ``shareholder'', in relation to a company, includes a person who has a right (whether the right is enforceable presently or in the future and whether on the fulfilment of a condition or not) to have his name entered in the company's register of members.

SECTION 8  LIABILITY TO PAY TAX  

8(1)  [Vendors]  

Subject to this Act, where at any time a vendors taxable amount exists in relation to a person, the person is liable to pay the tax imposed on that amount by the Taxation (Unpaid Company Tax - Vendors) Act 1982.

8(2)  [Promoters]  

Subject to this Act, where at any time a promoters taxable amount exists in relation to an eligible promoters class, the persons included in that class are jointly and severally liable to pay the tax imposed on that amount by the Taxation (Unpaid Company Tax - Promoters) Act 1982.

8(3)  [Additional company tax accruing after assessment]  

Where an assessment has been made, in relation to a sale or purchase of shares, or of an interest in shares, under a scheme, of the recoupment tax payable by a person on a primary taxable amount, or promoters taxable amount, ascertained by reference to an amount of company tax due and payable by a company in relation to a year of income that remained unpaid at the time when the assessment was made, the liability of the person in respect of recoupment tax or late payment tax in respect of that sale or purchase of those shares or of that interest in respect of that year of income shall not be increased on account of any additional tax payable by the company under section 207 of the Assessment Act that accrues after the time when the assessment was made.

8(4)  [Additional company tax accruing after assessment]  

Where an assessment has been made, in relation to a sale of shares, or of an interest in shares, under a scheme, of the recoupment tax payable by a person on a secondary taxable amount, being recoupment tax ascertained by reference to an amount of company tax due and payable by a company in relation to a year of income, the liability of the person in respect of recoupment tax or late payment tax in respect of that sale of those shares or of that interest in respect of that year of income:

(a)  shall not be increased on account of any additional tax payable by the company under section 207 of the Assessment Act that accrues after the time when the assessment was made; and

(b)  in a case to which subsection 6(3) applies, shall not be reduced on account of any change in the opinion of the Commissioner as to the likelihood of the recoupment tax referred to in that subsection being paid.

8(5)  [Amendment of company's assessment]  

Where:

(a)  an assessment (in this subsection referred to as the ``recoupment tax assessment'') is made of the recoupment tax payable by a person in relation to a sale or purchase of shares, or of an interest in shares, in relation to an amount of ordinary company tax or undistributed profits tax due and payable by a company in relation to a year of income; and

(b)  after the recoupment tax assessment is made, the assessment in relation to the ordinary company tax or undistributed profits tax, as the case may be, is amended,

the amount of the recoupment tax that the person is liable to pay in respect of that sale or purchase of those shares or of that interest, in relation to the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to that year of income is the amount that the person would have been liable to pay 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 under the amended assessment had been payable by the company under the assessment that was amended.

8(6)  [Promoter's liability where vendor subsequently assessed]  

Where:

(a)  an assessment is made of the promoters recoupment tax payable by a person or persons in relation to a purchase of shares in relation to an amount of ordinary company tax or undistributed profits tax due and payable by a company in relation to a year of income;

(b)  the promoters taxable amount to which the recoupment tax relates was ascertained under paragraph 7(1)(k) or (2)(k); and

(c)  after the assessment of the promoters recoupment tax is made, vendors recoupment tax becomes payable in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income,

the amount of the promoters recoupment tax that is payable by the person or persons in respect of that purchase of those shares, in relation to the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income is the amount that person or those persons would have been liable to pay if the promoters taxable amount had been ascertained under paragraph 7(1)(j) or (2)(j), as the case may be.

8(7)  [Remission of additional tax or late payment tax]  

For the purposes of this Act, where any additional tax payable under section 207 of the Assessment Act or any late payment tax is remitted, that additional tax or late payment tax, as the case may be, shall be deemed never to have been payable.

SECTION 9  REDUCTION OF LIABILITY WHERE TAX PAID  

9(1)  [Reduction in vendors recoupment tax]  

Where:

(a)  in relation to a sale of shares, or of an interest in shares, under a scheme, recoupment tax is or was payable on a vendors taxable amount in relation to an amount of ordinary company tax or undistributed profits tax payable by a company in relation to a year of income; and

(b)  after the recoupment tax became payable, an amount (in this subsection referred to as the ``company tax payment'') that is paid to the Commissioner is applied, or is deemed to have been applied, in reduction of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income,

there shall be deemed to be applied, or to have been applied, in reduction of the recoupment tax that is or was payable on the vendors taxable amount:

(c)  if the vendors taxable amount is a primary taxable amount - the amount ascertained by multiplying the amount of the company tax payment by the apportionment factor in relation to the primary taxable amount; and

(d)  if the vendors taxable amount is a secondary taxable amount - the amount ascertained by multiplying the company tax payment by the reduction factor in relation to the secondary taxable amount.

9(2)  [Reduction factor]  

For the purposes of subsection (1), the reduction factor in relation to a secondary taxable amount is the product of the numbers that are the relevant numbers in relation to:

(a)  the secondary taxable amount;

(b)  the vendors taxable amount by reference to which, or to recoupment tax on which, the secondary taxable amount was ascertained; and

(c)  any other vendors taxable amount by reference to which, or to recoupment tax on which, a vendors taxable amount to which paragraph (b) or this paragraph applies was ascertained.

9(3)  [Relevant number]  

For the purposes of subsection (2), the relevant number in relation to a primary taxable amount or a secondary taxable amount is:

(a)  in the case of a primary taxable amount - the apportionment factor in relation to the primary taxable amount; and

(b)  in the case of a secondary taxable amount - the number that bears to 1 the same proportion as the secondary taxable amount bears to the vendors taxable amount, or to the recoupment tax on a vendors taxable amount, as the case may be, by reference to which the secondary taxable amount was ascertained.

9(4)  [Tax paid at earlier level of liability]  

Where:

(a)  recoupment tax is or was payable on a secondary taxable amount and recoupment tax is payable on the vendors taxable amount by reference to which, or to recoupment tax on which, the secondary taxable amount was ascertained; and

(b)  an amount of recoupment tax on that vendors taxable amount is paid or an amount is deemed, by another application of this subsection, to have been applied in reduction of the recoupment tax payable on that vendors taxable amount,

there shall be deemed to be applied, or to have been applied, in reduction of the recoupment tax that is or was payable on the secondary taxable amount, an amount equal to so much of the amount paid or deemed to be applied as mentioned in paragraph (b) as bears to that amount the same proportion as the secondary taxable amount bears to the vendors taxable amount, or to the recoupment tax by reference to which the secondary taxable amount was ascertained, as the case may be.

9(5)  [Tax paid at later level of liability]  

Where:

(a)  recoupment tax is or was payable on a vendors taxable amount and recoupment tax is payable on a secondary taxable amount ascertained by reference to the vendors taxable amount or to recoupment tax on the vendors taxable amount; and

(b)  an amount of recoupment tax on the secondary taxable amount is paid or an amount is deemed, by another application of this subsection, to have been applied in reduction of the recoupment tax payable on the secondary taxable amount,

an amount equal to the amount paid or deemed to be applied as mentioned in paragraph (b) shall be deemed to be applied, or to have been applied, in reduction of the recoupment tax that is or was payable on the vendors taxable amount.

9(6)  [Reduction in promoters recoupment tax]  

Where:

(a)  in relation to a purchase of shares under a scheme, recoupment tax is or was payable on a promoters taxable amount in relation to an amount of ordinary company tax or undistributed profits tax payable by a company in relation to a year of income; and

(b)  after the recoupment tax became payable, an amount (in this subsection referred to as the ``company tax payment'') that is paid to the Commissioner is applied in reduction of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income,

there shall be deemed to be applied, or have been applied, in reduction of the recoupment tax that is or was payable on the promoters taxable amount:

(c)  if the promoters taxable amount was ascertained under paragraph 7(1)(j) or (2)(j) and paragraph (e) of this subsection does not apply - an amount equal to 20% of the company tax payment;

(d)  if the promoters taxable amount was ascertained under paragraph 7(1)(k) or (2)(k) and paragraph (e) of this subsection does not apply - an amount equal to the company tax payment; and

(e)  if, by reason of an application of subsection 7(3), the promoters taxable amount is less than it would otherwise have been - such amount (if any) as the Commissioner determines, not exceeding the amount that would otherwise be applicable under paragraph (c) or (d), as the case may be.

9(7)  [Payment by promoter reduces company tax]  

Where:

(a)  in relation to a purchase of shares under a scheme, recoupment tax is payable on a promoters taxable amount in relation to an amount of ordinary company tax or undistributed profits tax payable by a company in relation to a year of income; and

(b)  an amount of recoupment tax on that promoters taxable amount is paid to the Commissioner,

an amount equal to the amount paid shall, for the purposes of this Act (other than section 7) and the Assessment Act (other than paragraph (a) of the definition of ``the distributable income'' in subsection 103(1)), be deemed to have been applied in reduction of the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income and remaining unpaid at the time when the amount referred to in paragraph (b) is paid.

9(8)  [Deemed reduction of late payment tax]  

Where under this section an amount is deemed to be applied, or to have been applied, in reduction of the recoupment tax that is or was payable on an eligible taxable amount, being recoupment tax that includes or included late payment tax, the amount shall, to the extent to which it does not exceed the amount of that late payment tax, be deemed to be applied, or to have been applied, in reduction of that late payment tax and the balance (if any) shall be deemed to be applied, or to have been applied, in reduction of the remaining recoupment tax.

9(9)  [``Recoupment tax'']  

In this section, ``recoupment tax'' includes late payment tax.

SECTION 10  RIGHT OF CONTRIBUTION AND APPORTIONMENT OF LIABILITY  

10(1)  [Contribution by co-promoters]  

Where:

(a)  the persons included in an eligible promoters class are jointly and severally liable to pay recoupment tax on a promoters taxable amount; and

(b)  a person included in that eligible promoters class has paid any of that recoupment tax,

the person referred to in paragraph (b) may, in a court of competent jurisdiction, recover by way of contribution and as a debt from any of the other persons included in the class such part of the amount paid as the court considers just and equitable.

10(2)  [Apportionment of liability]  

Where proceedings against a person under section 209 of the Assessment Act for recovery of any promoters recoupment tax payable on a promoters taxable amount are instituted in any court, the court may:

(a)  on the application of the person, join, as co-defendant or as co-defendants in the proceedings, a specified person or specified persons who are included in the eligible promoters class in relation to the promoters taxable amount; and

(b)  having regard to:

(i) the nature and extent of the participation of the co-defendants in the scheme referred to in paragraph 7(1)(a) or (2)(a), as the case may be, or in the arrangement or transaction referred to in paragraph 7(1)(g) or (2)(g), as the case may be; and

(ii) the extent of any benefits that the co-defendants have obtained, or may reasonably be expected to obtain, as a result of the carrying out of the scheme referred to in paragraph 7(1)(a) or (2)(a), as the case may be,

determine, on just and equitable grounds, the respective proportions of the amount of the promoters recoupment tax that the co-defendants are liable to pay.

10(3)  [``Promoters recoupment tax'']  

In this section ``promoters recoupment tax'' includes late payment tax.

SECTION 11  DECLARATION EXCLUDING PERSONS FROM ELIGIBLE PROMOTERS CLASS  

11(1)  [Application to Federal Court]  

Where prescribed proceedings in relation to a person in relation to promoters recoupment tax are pending in any court, the person may make an application to the Federal Court for a declaration that, by reason of special circumstances, it is not just and equitable, for the purposes of those prescribed proceedings, that the person be included in the eligible promoters class to which the promoters recoupment tax relates and, where the person makes such an application, those prescribed proceedings, and any other prescribed proceedings in relation to the person that are pending in any court at the time when the application is made and relate to promoters recoupment tax to which the eligible promoters class relates, are, by force of this subsection, transferred to the Federal Court.

11(2)  [Transfer to Federal Court]  

Where proceedings are transferred from a court under subsection (1):

(a)  all documents filed of record in that court, and all moneys lodged with that court, in relation to the proceedings shall be transmitted to the Registrar of the Federal Court; and

(b)  the Federal Court shall proceed as if the proceedings had originally been instituted in the Federal Court and as if the same proceedings had been taken in the Federal Court as had been taken in the court from which the proceedings were transferred.

11(3)  [Commissioner may intervene]  

The Commissioner may intervene in proceedings before the Federal Court on an application under subsection (1) and, where he so intervenes, he shall be deemed to be a party to the proceedings.

11(4)  [Other interested parties]  

A person (other than the Commissioner) whose interests may be affected by the order of the Federal Court on an application under subsection (1) may, by order of the Federal Court, be made a party to the proceedings on the application.

11(5)  [Matters to be considered by Federal Court]  

In determining whether or not it is just and equitable that a person be included in the eligible promoters class in relation to a promoters taxable amount, the Federal Court shall have regard to:

(a)  the nature and extent of any participation of the person in the scheme referred to in paragraph 7(1)(a) or (2)(a), as the case may be, or in the arrangement or transaction referred to in paragraph 7(1)(g) or (2)(g), as the case may be;

(b)  the extent of any benefit that the person has obtained, or may reasonably be expected to obtain, as a result of the carrying out of the scheme referred to in paragraph 7(1)(a) or (2)(a), as the case may be; and

(c)  any otherrelevant matters.

11(6)  [Effect of declaration]  

Where the Federal Court makes a declaration under this section that it is not just and equitable, for the purposes of particular prescribed proceedings in relation to a person, that the person be included in an eligible promoters class, the person shall, for all purposes of this Act, be deemed not to be, and never to have been, included in that eligible promoters class.

11(7)  [Earlier court order not affected]  

Subsection (6) does not affect any order made by a court in proceedings under section 10 of this Act or section 209 of the Assessment Act before the date on which the application for the declaration referred to in that subsection was made.

11(8)  [Exclusive jurisdiction of Federal Court]  

Where proceedings are pending on an application made by a person under subsection (1) in relation to an eligible promoters class, any prescribed proceedings in relation to the person in relation to promoters recoupment tax to which that eligible promoters class relates may be instituted in the Federal Court and shall not be instituted in any other court.

11(9)  [Ancillary jurisdiction]  

The Federal Court has jurisdiction with respect to matters arising under this section.

11(10)  [Interpretation]  

In this section:

``Federal Court'' means the Federal Court of Australia;

``prescribed proceedings'' , in relation to a person, means proceedings to the extent to which they relate to:

(a)  the recovery from the person by the Commissioner or a Deputy Commissioner of promoters recoupment tax; or

(b)  the recovery from the person under section 10 of an amount by way of contribution in respect of an amount of promoters recoupment tax paid by another person;

``proceedings'' includes cross-proceedings and proceedings by way of appeal.

SECTION 12  APPLICATION OF PAYMENTS   12  (Repealed by Act No 11 of 1999)

SECTION 13  LATE PAYMENT OF TAX  

13(1)  [Liability to pay general interest charge]  

If any of the recoupment tax which a person is liable to pay remains unpaid after the time by which it is due to be paid, the person is liable to pay the general interest charge on the unpaid amount.

Note:

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

13(2)  [Extent of liability]  

The person is liable to pay the general interest charge for each day in the period that:

(a)  started at the beginning of the day by which the recoupment tax was due to be paid; and

(b)  finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) the recoupment tax;

(ii) general interest charge on any of the recoupment tax.

13(3)  [``additional tax'']  

The amount of the general interest charge is taken to be additional tax payable under this section.

13(4)  [Definition]  

In this section:

recoupment tax includes additional tax under Part VII of the Assessment Act as that Part applies for the purposes of this Act.

SECTION 14  CHANGE OF TRUSTEE  

14(1)  [Sale by former trustee]  

Where:

(a)  a person who was the holder, or one of the joint holders, of shares in the capacity of trustee of a trust estate sold the shares, or his interest in the shares; and

(b)  at a later time, another person is trustee of that trust estate,

for the purposes of the application of this Act in relation to that later time, the shares or interest shall be taken to have been sold by the trustee referred to in paragraph (b) and not by the trustee referred to in paragraph (a).

14(2)  [Purchase by former trustee]  

Where:

(a)  a person purchased shares in the capacity of trustee of a trust estate; and

(b)  at a later time, another person is trustee of that trust estate,

for the purposes of the application of this Act (other than paragraphs 7(8)(c) and (8)(f)) in relation to that later time, the shares shall be taken to have been purchased by the trustee referred to in paragraph (b) and not by the trustee referred to in paragraph (a).

SECTION 15  COMPANIES CEASING TO EXIST  

15(1)  [Companies to which section applies]  

This section has effect for the purposes of the application of this Act:

(a)  in relation to a sale or sales of shares under a scheme where, after the last sale time and either before or after the commencement of this Act, a company ceased to exist, being a company more than 90% of the voting power in which was, by virtue of rights attaching to the shares, capable of being controlled immediately before the first sale time, either directly or through one or more interposed companies, trustees or partnerships, by the person or persons who sold the shares; and

(b)  in relation to a purchase or purchases of shares under a scheme where, after the last purchase time and either before or after the commencement of this Act, a company ceased to exist, being a company more than 90% of the voting power in which was, by virtue of rights attaching to the shares, capable of being controlled immediately after the last purchase time, either directly or through one or more interposed companies, trustees or partnerships, by the person or persons who purchased the shares.

15(2)  [Where company disappears after assessment]  

Where the company ceased to exist after an assessment was made of the ordinary company tax or undistributed profits tax payable by the company in relation to a year of income:

(a)  if the company ceased to exist before the tax became due and payable under the assessment:

(i) the tax shall be taken to have become due and payable under the assessment notwithstanding that the company ceased to exist; and

(ii) the liability of the company in respect of ordinary company tax or undistributed profits tax, as the case may be, in relation to the year of income shall not be taken to have been affected or to be affected by the fact that the company ceased to exist; and

(b)  if the company ceased to exist after the tax became due and payable under the assessment - the liability of the company in respect of ordinary company tax or undistributed profits tax, as the case may be, in relation to the year of income shall not be taken to have been affected or to be affected by the fact that the company ceased to exist.

15(3)  [Commissioner may amend company's assessment]  

Where:

(a)  the company ceased to exist after an assessment was made of the ordinary company tax or undistributed profits tax payable by the company in relation to a year of income (in this section referred to as the ``relevant year of income'');

(b)  if the company had not ceased to exist, the Commissioner would be empowered under the Assessment Act to amend the assessment; and

(c)  a person or persons:

(i) is or are liable to pay recoupment tax;

(ii) in the opinion of the Commissioner is likely or are likely to become liable to pay recoupment tax; or

(iii) in the opinion of the Commissioner would, if the amendment were made, be likely to become liable to pay recoupment tax,

in relation to ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income,

the Commissioner may make an amended assessment (in this section referred to as the ``notional assessment'') of the ordinary company tax (in this section referred to as the ``notional ordinary company tax'') or undistributed profits tax (in this section referred to as the ``notional undistributed profits tax''), as the case may be, that would be payable by the company in relation to the relevant year of income if the company had not ceased to exist.

15(4)  [Where company disappears before assessment]  

Where:

(a)  the company ceased to exist before an assessment was made of the ordinary company tax or undistributed profits tax payable by the company in relation to a year of income (in this section also referred to as the ``relevant year of income''), being the year of income in which the last sale time or last purchase time in relation to the scheme occurred or a preceding year of income; and

(b)  the Commissioner is of the opinion that, if the company had not ceased to exist and an assessment had been made of the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income:

(i) ordinary company tax or undistributed profits tax, as the case may be, would have become due and payable by the company in relation to the relevant year of income; and

(ii) if that ordinary company tax or undistributed profits tax, as the case may be, had remained unpaid, recoupment tax would have become payable by a person or persons in relation to the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income,

the Commissioner may make an assessment (in this section also referred to as the ``notional assessment'') of the ordinary company tax (in this section also referred to as the ``notional ordinary company tax'') or undistributed profits tax (in this section also referred to as the ``notional undistributed profits tax''), as the case may be, that would be payable by the company in relation to the relevant year of income if the company had not ceased to exist.

15(5)  [Possible dividends disregarded]  

For the purposes of the making of an assessment under subsection (4) of undistributed profits tax that would be payable by a company if it had not ceased to exist, any dividends that the company might have paid if it had not ceased to exist shall be disregarded.

15(6)  [Service of notional assessment on promoters]  

Where all of the recoupment tax referred to in subsection (3) or (4) is promoters recoupment tax, the Commissioner shall serve notice of the notional assessment referred to in that subsection on the person, or one of the persons, as the case may be, referred to in paragraph (3)(c) or subparagraph (4)(b)(ii), as the case may be.

15(7)  [Service of notional assessment on vendors]  

Where subsection (6) does not apply in relation to the notional assessment, the following provisions have effect:

(a)  the Commissioner shall serve notice of the notional assessment on:

(i) where paragraph (3)(c) or subparagraph (4)(b)(ii), as the case may be, applies in relation to only one person in relation to recoupment tax that is vendors recoupment tax - that person; and

(ii) in any other case - any of the persons referred to in paragraph (3)(c) or subparagraph (4)(b)(ii), as the case may be, in relation to recoupment tax that is vendors recoupment tax; and

(b)  where notice of the notional assessment is served in accordance with subparagraph (a)(ii) - the Commissioner shall serve a copy of the notice of the notional assessment on each person (other than the person on whom the notice of the notional assessment was served) who is included in the representative class in relation to the vendors recoupment tax referred to in subparagraph (a)(ii).

15(8)  [Identity of other vendors]  

Where notice of the notional assessment and a copy or copies of that notice are served on persons under subsection (7), the Commissioner shall notify each of the persons of the identity of each of the other persons.

15(9)  [Objections]  

Where notice of the notional assessment is served under subsection (6) or (7):

(a)  if the notice was served under subsection (6) or subparagraph (7)(a)(i) - the person on whom the notice was served; and

(b)  if the notice was served under subparagraph (7)(a)(ii) - one person who:

(i) is included in the representative class in relation to the recoupment tax referred to in paragraph (3)(c) or (4)(b), as the case may be, that is vendors recoupment tax; and

(ii) is nominated, by notice signed by more than one-half of the persons included in that class and lodged with the Commissioner,

has the same rights under section 175A of the Assessment Act and Part IVC of the Taxation Administration Act 1953 in respect of the notional assessment as the company would have had if it had continued to exist and the notional assessment were an assessment of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income and, for the purpose of the exercise of those rights by the person, the provisions of that Division apply in relation to notional assessment in like manner as those provisions apply in relation to an assessment under the Assessment Act.

15(10)  [Representative class]  

For the purposes of this section, the following persons constitute the representative class in relation to vendors recoupment tax:

(a)  each person, not being a company, whose whereabouts is known to the Commissioner and in relation to whom the vendors recoupment tax is recoupment tax on a primary taxable amount;

(b)  each company (including a company in the capacity of trustee) that, in the opinion of the Commissioner, is carrying on business and in relation to which the vendors recoupment tax is recoupment tax on a primary taxable amount; and

(c)  the other persons referred to in subparagraph (7)(a)(ii) or, if those persons exceed 5 in number, 5 of those persons selected by the Commissioner as appropriate representatives of those persons.

15(11)  [Notional assessment, notional company tax]  

For the purposes of this Act:

(a)  the notional assessment shall be treated as if it were an assessment made under the Assessment Act of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income; and

(b)  the notional company tax that, at a particular time, is applicable in accordance with subsection (12) in relation to the company in relation to the relevant year of income by virtue of the notional assessment shall be treated as if it were an amount of ordinary company tax or undistributed profits tax, as the case may be, that has become due and payable by the company in relation to the relevant year of income and remains unpaid at that time.

15(12)  [Ascertainment of notional company tax]  

For the purpose of ascertaining the notional company tax that is applicable, at a particular time, in relation to the company in relation to the relevant year of income by virtue of the notional assessment, the provisions of the Assessment Act apply in relation to the notional assessment and the notional ordinary company tax or notional undistributed profits tax, as the case may be, to which the notional assessment relates as if:

(a)  the notional assessment were an assessment of the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the relevant year of income; and

(b)  the notional ordinary company tax or notional undistributed profits tax, as the case may be, were ordinary company tax or undistributed profits tax, as the case may be.

15(13)  [Amendment of assessments]  

Without limiting the generality of subsection (12), sections 170 and 207 of the Assessment Act apply for the purpose of determining the notional company tax that is applicable, at a particular time, in relation to the company by virtue of the notional assessment.

15(14)  [Voting rights attached to office]  

Subsections 5(6) and 7(11) have effect for the purposes of subsection (1) of this section in like manner as those subsections have effect for the purposes of paragraphs 5(1)(c) and (2)(c), and paragraphs 7(1)(c) and (2)(c), respectively.

SECTION 16  REQUEST TO ELIMINATE UNDISTRIBUTED AMOUNT  

16(1)  [Circumstances in which request may be made]  

Where:

(a)  in relation to a sale or sales of shares under a scheme:

(i) a primary taxable amount exists, or primary taxable amounts exist, in relation to a person (in this section referred to as the ``relevant person'' ) or each of 2or more persons (in this section referred to as the ``relevant persons'' ) in relation to an amount of undistributed profits tax payable in relation to a year of income by a company (in this section referred to as the ``relevant company'' ); or

(ii) primary taxable amounts exist in relation to a person (in this section also referred to as the ``relevant person'' ) or each of 2 or more persons (in this section also referred to as the ``relevant persons'' ) in relation to amounts of undistributed profits tax payable in relation to 2 or more years of income by a company (in this section also referred to as the ``relevant company'' ); and

(b)  an assessment of undistributed profits tax has been made in relation to the relevant company in relation to each year of income, being the year of income in which the last sale time occurred or a preceding year of income, in relation to which there is an undistributed amount in relation to the company,

a request that this section should apply, in relation to that sale or those sales of shares, in relation to the relevant company may be made by:

(c)  if, in the opinion of the Commissioner, it is reasonably practicable for the request to be made by a majority of the persons who constituted the board of directors of the relevant company immediately before the last sale time - a majority of those persons; or

(d)  in any other case - the relevant person, or the relevant persons together, as the case may be.

16(2)  [Form of request]  

A request under subsection (1) shall:

(a)  be in writing signed by the person or each of the persons, as the case may be, making the request; and

(b)  be sent to or lodged with the Commissioner.

16(3)  [Commissioner's discretion]  

On receipt of a request under subsection (1), the Commissioner may grant the request or he may refuse the request.

16(4)  [Relevant considerations]  

In deciding whether to grant or refuse the request, the Commissioner shall have regard to:

(a)  the likelihood that any tax that may become payable by reason of the operation of this section in relation to the request will be paid; and

(b)  any other matters that he considers relevant.

16(5)  [Consequences of granting request]  

Where a request is made under subsection (1), in relation to a sale of shares under a scheme, in relation to the relevant company and the request is granted by the Commissioner:

(a)  the relevant company shall, for the purposes of Division 7 of Part III of the Assessment Act, be deemed to have made a sufficient distribution in relation to each year of income to which paragraph (1)(a) applies;

(b)  for the purposes of the Assessment Act other than Division 11A of Part III and Division 4 of Part VI:

(i) the relevant company shall be deemed to have paid to the relevant person or each of the relevant persons, as the case may be, as a shareholder or shareholders in the company, in relation to each primary taxable amount referred to in paragraph (1)(a) that exists in relation to the person concerned, a dividend of an amount ascertained by multiplying the undistributed amount in relation to the relevant company in relation to the year of income (in this paragraph referred to as the ``relevant year of income'' ) to which the primary taxable amount relates by the apportionment factor in relation to the primary taxable amount; and

(ii) the dividend:

(A) shall be deemed to have been paid by the relevant company on the last day of the prescribed distribution period in relation to the relevant year of income out of profits derived by the relevant company from sources in Australia; and

(B) shall be deemed not to be a dividend to which subsection 44(2) of the Assessment Act applies; and

(c)  if an amount (in this paragraph referred to as the ``deemed company tax payment'' ) paid to the Commissioner after the time when the dividend is deemed to have been paid by the relevant company is deemed under subsection 9(7) to have been applied in reduction of undistributed profits tax that would, but for paragraph (a) of this subsection, be payable by the relevant company in relation to the relevant year of income:

(i) in a case to which subparagraph (ii) does not apply - the Commissioner shall pay to the relevant person to whom the dividend is deemed to have been paid an amount ascertained by multiplying the deemed company tax payment by the apportionment factor in relation to the primary taxable amount; and

(ii) if the dividend is deemed to have been paid to a person in the capacity of trustee of a trust estate - the Commissioner, having regard to the amounts included in the assessable incomes of the trust estate and of beneficiaries in the trust estate in respect of the deemed dividend, shall pay to the trustee of the trust estate, to a beneficiary or beneficiaries in the trust estate or to the trustee and a beneficiary or beneficiaries in the trust estate, an amount equal to, or, as the case requires, amounts in the aggregate equal to, the amount ascertained by multiplying the deemed company tax payment by the apportionment factor in relation to the primary taxable amount.

16(6)  (Omitted by No 123 of 1984)

16(7)  [Paragraph (5)(a) to be disregarded for sec 7 purposes]  

In forming an opinion for the purposes of section 7 as to whether vendors recoupment tax will become payable in relation to undistributed profits tax payable by a company in relation to a year of income, the Commissioner shall disregard the operation of paragraph (5)(a) of this section.

16(8)  [Undistributed profits tax deemed payable]  

For the purposes of section 7 and subsection 9(7), undistributed profits tax (other than additional tax payable under section 207 of the Assessment Act) that would be payable by a company at a particular time but for paragraph (5)(a) of this section shall be deemed to be payable by the company at that time.

16(9)  [Where undistributed profits tax fully paid for year]  

For the purposes of this section, where the whole of the undistributed profits tax payable by a company in relation to an undistributed amount in relation to a year of income has been paid, an undistributed amount shall not be taken to exist in relation to the company in relation to the year of income.

16(10)  [Where undistributed profits tax partly paid for year]  

For the purposes of the application of this section in relation to an undistributed amount in a case where a part of the undistributed profits tax payable upon the undistributed amount has been paid, the reference to the undistributed amount shall be read as a reference to so much of the undistributed amount as bears to the undistributed amount the same proportion as the amount of the undistributed profits tax on the undistributed amount that remains unpaid bears to the undistributed profits tax on the undistributed amount.

16(11)  [Section 16(10) - undistributed profits tax]  

A reference in subsection (10) to undistributed profits tax does not include a reference to additional tax payable under section 207 of the Assessment Act.

SECTION 17  REQUEST WHERE DIVIDEND DEEMED TO BE PAID TO TRUSTEE  

17(1)  [Circumstances in which request may be made]  

Where:

(a)  by the operation of subsection 16(5), a dividend (in this subsection referred to as the ``deemed dividend'' ) deemed to have been paid by a company is included in the assessable income of a trust estate of a year of income;

(b) but for this subsection, the trustee of the trust estate would be liable to be assessed and to pay tax under section 99 or 99A of the Assessment Act in respect of an amount attributable, in whole or in part, to an amount (in this subsection referred to as the ``relevant amount'' ) being the deemed dividend or a part of the deemed dividend; and

(c)  if the deemed dividend had been a dividend in fact paid by the company, the trustee would have had a discretion to pay the deemed dividend or part of the deemed dividend to, or apply the deemed dividend or part of the deemed dividend for the benefit of, a specified beneficiary or specified beneficiaries,

the trustee and that beneficiary, or the trustee and all or any of those beneficiaries, as the case may be, may request that, for the purposes of the application of the Assessment Act in relation to the trust estate in relation to the deemed dividend, the trustee shall be taken to have paid to or applied for the benefit of the beneficiary making the request, or to have paid to or applied for the benefit of the beneficiaries making the request in such proportions as are specified in the request, so much of the deemed dividend as is equal to the relevant amount.

17(2)  [Beneficiary under legal disability]  

For the purposes of the application of subsection (1), where the beneficiary or any of the beneficiaries referred to in paragraph (1)(c) is under a legal disability, a request under that subsection may be made on behalf of that beneficiary by another person who is not under a legal disability.

17(3)  [Form of request]  

A request under subsection (1) shall:

(a)  be in writing signed by each of the persons making the request; and

(b)  be sent to or lodged with the Commissioner.

17(4)  [Commissioner's discretion]  

On receipt of a request under subsection (1), the Commissioner may grant the request or he may refuse the request.

17(5)  [Relevant considerations]  

In deciding whether to grant or refuse the request, the Commissioner shall have regard to:

(a)  the likelihood that any tax that may become payable by reason of the operation of this section in relation to the request will be paid; and

(b)  any other matters that he considers relevant.

17(6)  [Consequence of granting request]  

Where the Commissioner grants a request made in accordance with subsection (1) in relation to a dividend that is deemed to have been paid by a company and is included in the assessable income of a trust estate, the trustee shall, for the purposes of the Assessment Act, be taken to have paid or applied the dividend, or the part of the dividend to which the request relates, in accordance with the request, on the day on which the dividend is deemed to have been paid by the company.

SECTION 18  NOTIFICATION OF COMPANY TAX LIABILITY  

18(1)  [Service of company's assessment notice on vendors]  

Where:

(a)  under the Assessment Act, the Commissioner is required or permitted to serve a notice of assessment on a company in relation to the liability of the company to pay ordinary company tax or undistributed profits tax in relation to a year of income; and

(b)  vendors recoupment tax is payable, or the Commissioner is of the opinion that vendors recoupment tax is likely to become payable, by a person or persons in relation to ordinary company tax or undistributed profits tax, as the case may be, that is payable or may become payable by the company in relation to that year of income,

the notice shall, notwithstanding section 174 of the Assessment Act, be served on the company by being served on:

(c)  where the vendors recoupment tax is payable, or in the opinion of the Commissioner, is likely to become payable, by only one person - that person; and

(d)  in any other case - any of the persons referred to in paragraph (b),

and, where the notice is served in accordance with paragraph (d), the Commissioner shall serve a copy of the notice on each person (other than the person on whom the notice was served) who is included in the representative class in relation to the vendors recoupment tax.

18(2)  [Identity of other vendors]  

Where a notice of assessment and a copy or copies of the notice are served on persons under subsection (1) in relation to the liability of a company to pay ordinary company tax or undistributed profits tax in relation to a year of income, the Commissioner shall notify each of the persons of the identity of each of the other persons.

18(3)  [Objections]  

Where a notice of assessment is served under subsection (1) in relation to the liability of a company to pay company tax in relation to a year of income:

(a)  if the notice was served under paragraph (1)(c) - the person on whom the notice was served; and

(b)  if the notice was served under paragraph (1)(d) - one person who:

(i) is included in the representative class in relation to the recoupment tax referred to in paragraph (1)(b); and

(ii) is nominated, by notice signed by more than one-half of the persons included in that class and lodged with the Commissioner,

has the same rights under section 175A of the Assessment Act and Part IVC of the Taxation Administration Act 1953 in relation to that liability as the company has and, for the purpose of the exercise of those rights by the person, the provisions of that Division apply in like manner as those provisions would apply in relation to the exercise of those rights by the company.

18(4)  [Service of company's assessment notice on promoters]  

Where:

(a)  under the Assessment Act, the Commissioner is required or permitted to serve a notice of assessment on a company in relation to the liability of the company to pay ordinary company tax or undistributed profits tax in relation to a year of income;

(b)  promoters recoupment tax is payable, or the Commissioner is of the opinion that promoters recoupment tax is likely to become payable, by a person or persons in relation to ordinary company tax or undistributed profits tax, as the case may be, that is payable or may become payable by the company in relation to that year of income; and

(c)  the notice is not required to be served in accordance with subsection (1),

the notice shall, notwithstanding section 174 of the Assessment Act, be served on the company by being served on the person or any of the persons referred to in paragraph (b).

18(5)  [Notice of assessment already served on company]  

Where:

(a)  in a case to which subsection (1) did not apply, a notice of assessment in respect of the liability of a company to pay ordinary company tax or undistributed profits tax in relation to a year of income has been served, or purported to have been served, on the company, whether before or after the commencement of this Act; and

(b)  the Commissioner is of the opinion that vendors recoupment tax is likely to become payable by a person or persons in relation to ordinary company tax or undistributed profits tax, as the case may be, that is payable or may become payable by the company in relation to that year of income,

the following provisions have effect:

(c)  the Commissioner shall serve a copy of the notice of assessment on:

(i) where, in the opinion of the Commissioner, the vendors recoupment tax is likely to become payable by only one person - that person; and

(ii) in any other case - any of the persons referred to in paragraph (b);

(d)  where the copy of the notice of assessment is served in accordance with subparagraph (c)(ii) - the Commissioner shall serve a copy of the copy of the notice of assessment on each person (other than the person on whom the copy of the notice of assessment was served) who is included in the representative class in relation to the vendors recoupment tax; and

(e)  if the notice of assessment was not validly served on the company, the service of the copy of the notice in accordance with paragraph (c) shall be deemed to be service on the company of the notice of assessment.

18(6)  [Vendor already aware]  

Subsection (5) does not apply in relation to a notice that has been served or purported to have been served on a company if the Commissioner has reason to believe that the service or purported service brought the contents of the notice to the attention of the person, or any of the persons, as the case may be, referred to in paragraph (5)(b).

18(7)  [Identity of other parties]  

Where a copy of a notice of assessment and a copy or copies of that copy are served on persons under subsection (5) in relation to the liability of a company to pay ordinary company tax or undistributed profits tax in relation to a year of income, the Commissioner shall notify each of the persons of the identity of each of the other persons.

18(8)  [Objections]  

Where a copy of a notice of assessment is served under subsection (5) in relation to the liability of a company to pay company tax in relation to a year of income:

(a)  if the copy was served under subparagraph (5)(c)(i) - the person on whom the copy was served; and

(b)  if the copy was served under subparagraph (5)(c)(ii) - one person who:

(i) is included in the representative class in relation to the recoupment tax referred to in paragraph (5)(b); and

(ii) is nominated, by notice signed by more than one-half of the persons included in that class,

has the same rights under section 175A of the Assessment Act and Part IVC of the Taxation Administration Act 1953 in relation to that liability as the company would have had if the notice of assessment had been served on the company on the date on which the copy of the notice was served under subsection (5) and, for the purpose of the exercise of those rights by the person, the provisions of that Division apply in like manner as those provisions would apply in relation to the exercise of those rights by the company.

18(9)  [Service of copy assessment notice on promoters]  

Where:

(a)  in a case to which subsection (4) did not apply, a notice of assessment in respect of the liability of a company to pay ordinary company tax or undistributed profits tax in relation to a year of income has been served or purported to have been served, on the company, whether before or after the commencement of this Act;

(b)  the Commissioner is of the opinion that promoters recoupment tax is likely to become payable by a person or persons in relation to the ordinary company tax or undistributed profits tax, as the case may be, that is payable or may become payable by the company in relation to that year of income; and

(c)  a copy of the notice is not required to be served in accordance with subsection (5),

the Commissioner shall serve a copy of the notice of assessment on the person or on any of the persons referred to in paragraph (b) and, if the notice of assessment was not validly served on the company, the service of the copy of the notice shall be deemed to be service on the company of the notice of assessment.

18(10)  [Representative class]  

For the purposes of this section, the following persons constitute the representative class in relation to vendors recoupment tax in relation to company tax payable by a company in relation to a year of income:

(a)  each person, not being a company, whose whereabouts is known to the Commissioner and in relation to whom the vendors recoupment tax is recoupment tax on a primary taxable amount;

(b)  each company (including a company in the capacity of trustee) that, in the opinion of the Commissioner, is carrying on business and in relation to which the recoupment tax is recoupment tax on a primary taxable amount; and

(c)  the other persons referred to in paragraph (1)(b) or (5)(b), as the case may be, or, if those persons exceed 5 in number, 5 of those persons selected by the Commissioner as appropriate representatives of those persons.

18(11)  [Interpretation]  

In this section:

``ordinary company tax'' , in relation to a company, includes additional tax payable by the company under Part VII of the Assessment Act in relation to income tax referred to in paragraph (a) of the definition of ``ordinary company tax'' in subsection 3(1);

``undistributed profits tax'' , in relation to a company, includes additional tax payable by the company under Part VII of the Assessment Act in relation to additional tax referred to in paragraph (a) of the definition of ``undistributed profits tax'' in subsection 3(1).

SECTION 19  REMISSION OF RECOUPMENT TAX   19 

Where:

(a)  a person, with the leave of the Commissioner, makes a payment to the Commissioner of an amount equal to the amount of the vendors recoupment tax that would be payable by the person on the date on which the payment is made if an assessment were made on that date, in relation to an amount (in this section referred to as the ``relevant company tax'' ) of ordinary company tax or undistributed profits tax payable by a company in relation to a year of income, of the vendors recoupment tax payable by the person in relation to the relevant company tax; and

(b)  vendors recoupment tax later becomes payable by the person in relation to the ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income,

so much (if any) of the recoupment tax referred to in paragraph (b) as is attributable to tax that:

(c)  is payable by the company under section 207 of the Assessment Act in relation to the relevant company tax; and

(d)  accrued after the date on which the payment was made to the Commissioner,

is, by force of this section, remitted.

SECTION 20  ARRANGEMENTS FOR PAYMENT OF COMPANY TAX  

20(1)  [Arrangement for payment]  

Where:

(a)  but for paragraphs 5(1)(f) and (2)(f) and subsections 5(4) and 6(2), a primary taxable amount or primary taxable amounts would exist, in relation to a sale or sales of shares under a scheme, in relation to company tax payable by a company;

(b)  assessments have been made of the ordinary company tax and undistributed profits tax payable by the company in relation to the year of income in which the last sale time occurred and each preceding year of income; and

(c)  no assessment has been made of the vendors recoupment tax payable by any person in relation to company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income,

the Commissioner may enter into an arrangement with a person or persons in relation to the payment of all of the ordinary company tax and undistributed profits tax that is payable by the company in relation to the year of income in which the last sale time occurred and each preceding year of income.

20(2)  [Consequence of payment]  

Where, in accordance with the arrangement, the person pays or the persons pay to the Commissioner all of the company tax payable by the company, on the date on which the payment is made, in relation to the year of income in which the last sale time occurred and each preceding year of income:

(a)  in determining for the purposes of section 7 and subsection 9(7) whether company tax (other than additional tax payable under section 207 of the Assessment Act) that is payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income remains unpaid, the payment under the arrangement shall be deemed not to have been made;

(b)  in forming an opinion for the purposes of section 7 as to whether vendors recoupment tax will become payable in relation to company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income, the Commissioner shall disregard the payment under the arrangement; and

(c)  if an amount that is paid to the Commissioner after the time when the payment is made under the arrangement is deemed, under subsection 9(7), to have been applied in reduction of company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income, the Commissioner shall refund to the person who made the payment under the arrangement or to the persons jointly who made the payment under the arrangement, as the case may be, so much of the amount of the payment made under the arrangement as is equal to the amount that is deemed to have been so applied under subsection 9(7).

SECTION 21  INSTALMENT ARRANGEMENTS IN RELATION TO LATE PAYMENT OF COMPANY TAX  

21(1)  [Arrangement for payment]  

Where:

(a)  but for paragraphs 5(1)(f) and (2)(f) and subsections 5(4) and 6(2), a primary taxable amount or primary taxable amounts would exist, in relation to a sale or sales of shares under a scheme, in relation to company tax payable by a company;

(b)  assessments have been made of the ordinary company tax and undistributed profits tax payable by the company in relation to the year of income in which the last sale time occurred and each preceding year of income;

(c)  no objection has been lodged against any assessment referred to in paragraph (b) that relates to company tax payable by the company in relation to which, but for paragraphs 5(1)(f) and (2)(f) and subsections 5(4) and 6(2), a primary taxable amount or primary taxable amounts would exist; and

(d)  no assessment has been made of vendors recoupment tax payable by any person in relation to company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income,

the Commissioner may enter into an arrangement with a person or persons in relation to the payment by instalments, over a period of 12 months or such longer period as the Commissioner, in special circumstances, determines, of all the ordinary company tax and undistributed profits tax that is payable by the company in relation to the year of income in which the last sale time occurred and each preceding year of income and, where such an arrangement is entered into, the following provisions have effect:

(e)  subject to paragraphs (f) and (g), all payments made in accordance with the arrangement shall, for the purposes of this Act and the Assessment Act, be deemed to have been made at the time when the first payment was made in accordance with the arrangement;

(f)  in determining for the purposes of section 7 and subsections 9(6) and (7) whether company tax (other than additional tax payable under section 207 of the Assessment Act) that is payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income remains unpaid, payments made under the arrangement shall be deemed not to have been made;

(g)  in forming an opinion for the purposes of section 7 as to whether vendors recoupment tax will become payable in relation to company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income, the Commissioner shall disregard payments made in accordance with the arrangement; and

(h)  if:

(i) all payments that are required to be made under the arrangement are made in accordance with the arrangement; and

(ii) after the time when the last payment is made in accordance with the arrangement, an amount that is paid to the Commissioner is deemed, under subsection 9(7), to have been applied in reduction of company tax payable by the company in relation to the year of income in which the last sale time occurred or a preceding year of income,

the Commissioner shall refund to the person who made the payments under the arrangement or to the persons jointly who made the payments under the arrangement, as the case may be, so much of the aggregate of the payments made under the arrangement as is equal to the amount that is deemed to have been so applied under subsection 9(7).

21(2)  [Where objection lodged against company's assessment]  

Where, after an arrangement referred to in subsection (1) is entered into, an objection is lodged against an assessment referred to in paragraph (l)(c), paragraphs (1)(e) to (1)(h) (inclusive) do not apply, and shall be deemed never to have applied, in relation to the arrangement.

SECTION 22  ARRANGEMENTS, ETC., TO AVOID OPERATION OF ACT  

22(1)  [Scheme void]  

Where:

(a)  a scheme entered into or carried out by a person after 25 July 1982 would, but for this section, have the effect of in any way, directly or indirectly, defeating, evading or avoiding any liability of the person to pay recoupment tax; and

(b)  it would be reasonable to conclude or infer that the person entered into or carried out the scheme for the purpose of in any way, directly or indirectly, defeating, evading or avoiding any liability of the person to pay recoupment tax or future recoupment tax,

then, in any prescribed recovery proceedings, the scheme shall be treated as being void in so far as it would, but for this section, have the effect mentioned in paragraph (a) but without prejudice to such validity as the scheme may have for any other purpose.

22(2)  [Transfers of property void]  

Without limiting the generality of subsection (1), where:

(a)  a person (in this subsection referred to as the ``taxpayer'' ) is liable to pay an amount of recoupment tax to the Commissioner;

(b)  after 25 July 1982, the taxpayer has transferred or transfers property to another person;

(c)  the transfer would, but for this section, have the effect of rendering the taxpayer unable to pay the recoupment tax, or any part of the recoupment tax;

(d)  having regard to:

(i) the manner and circumstances in which the transfer was made;

(ii) the nature of any connection (whether of a business, family or other nature) between the taxpayer and the other person referred to in paragraph (b); and

(iii) any other relevant circumstances,

it would be reasonable to conclude or infer that the transfer was made by the taxpayer for the purpose of rendering the taxpayer unable to pay the recoupment tax, a part of the recoupment tax or any future recoupment tax; and

(e)  either of the following conditions is satisfied:

(i) the transfer was made by way of gift; or

(ii) having regard to the circumstances referred to in paragraph (d), it would be reasonable to conclude or infer that the person to whom the property was transferred believed or suspected that the transfer was made by the taxpayer for the purpose referred to in paragraph (d),

then, in any prescribed recovery proceedings, the transfer shall be treated as being void in so far as it would, but for this section, have the effect mentioned in paragraph (c) but without prejudice to such validity as the transfer may have for any other purpose.

22(3)  [Dominant purpose of scheme]  

A reference in this section to a scheme being entered into or carried out or a transfer of property being made by a person for a particular purpose shall be read as including a reference to the scheme being entered into or carried out or the transfer being made, as the case may be, by the person for 2 or more purposes of which that particular purpose is the dominant purpose.

22(4)  [``Transfer of property'']  

In this section:

(a)  a reference to a transfer of property by a person includes a reference to:

(i) the execution by the person of a charge on property of the person in favour of another person;

(ii) the incurring by the person of an obligation in favour of another person; and

(iii) any scheme that has the effect, directly or indirectly, of diminishing the value of any property of the person and increasing the value of the property of another person or persons; and

(b)  a reference, in relation to a transfer of property to which paragraph (a) applies, to the person to whom the property was transferred is a reference to:

(i) in a case to which subparagraph (a)(i) applies - the person in whose favour the charge referred to in that subparagraph was executed;

(ii) in a case to which subparagraph (a)(ii) applies - the person in whose favour the obligation referred to in that subparagraph was incurred; and

(iii) in a case to which subparagraph (a)(iii) applies - the person, or any of the persons, referred to in that paragraph the value of whose property was increased by reason of the transfer.

22(5)  [Scheme to increase value of property]  

A reference in subsection (4) to a scheme that has the effect, directly or indirectly, of increasing the value of the property of a person includes a reference to a scheme that has the effect, directly or indirectly, that the person becomes the owner of property of which the person would not have been the owner but for the scheme, whether or not the property would have existed but for the scheme.

22(6)  [Interpretation]  

In this section:

``future recoupment tax'' , in relation to a person in relation to a scheme, means recoupment tax that could reasonably have been expected by the person at the time when the scheme was entered into or carried out to become payable by the person after that time;

``prescribed recovery proceedings'' , in relation to recoupment tax, means:

(a)  proceedings by the Commissioner or a Deputy Commissioner for recovery of the recoupment tax or part of the recoupment tax or of an amount that includes the recoupment tax or part of the recoupment tax;

(b)  proceedings for enforcement of a judgment given in proceedings referred to in paragraph (a); or

(c)  proceedings by a trustee within the meaning of the Bankruptcy Act 1966 or by a liquidator, being proceedings for the benefit of the Crown, the Commissioner or a Deputy Commissioner or for the benefit of persons including the Crown, the Commissioner or a Deputy Commissioner;

``recoupment tax'' includes late payment tax.

SECTION 23  EVIDENCE  

23(1)  [Certificate as to unpaid company tax]  

For the purposes of this Act, a certificate signed by the Commissioner, a Second Commissioner or a Deputy Commissioner and stating that an amount of company tax specified in the certificate is due and payable by a company and that, on a date specified in the certificate, that company tax remained unpaid, is conclusive evidence of the matters stated in the certificate except in proceedings under Part IVC of the Taxation Administration Act 1953 in relation to an assessment in respect of that company tax.

23(2)  [Purported certificate]  

A document purporting to be a certificate referred to in subsection (1) shall, unless the contrary is established, be taken to be such a certificate.

23(3)  [Notional company tax included]  

A reference in subsection (1) to company tax due and payable by a company and remaining unpaid at a particular time includes a reference to notional company tax applicable in relation to a company at a particular time in accordance with subsection 15(11).

SECTION 24  REGULATIONS   24 

The Governor-General may make regulations, not inconsistent with this Act, prescribing matters:

(a)  required or permitted by this Act to be prescribed; or

(b)  necessary or convenient to be prescribed for carrying out or giving effect to this Act,

and, in particular, may make regulations prescribing penalties not exceeding a fine of $500 for offences against the regulations.