Tax Laws Amendment (2007 Measures No. 3) Act 2007 (79 of 2007)

Schedule 1   Distributions to entities connected with a private company and related issues

Part 1   Main amendments

Income Tax Assessment Act 1936

14   At the end of section 109UA

Add:

(5) Subsection (1) does not apply if:

(a) as a result of the first entity’s liability mentioned in that subsection, the target entity has a liability (other than a contingent liability) to make a payment to the first entity; and

(b) because of section 109N, the liability to make a payment to the first entity is not treated under this Division as giving rise to a dividend paid to the first entity.