INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 1A - Circumstances in which a taxpayer can qualify for a franking credit, a franking rebate or the intercorporate dividend rebate  

Subdivision A - Preliminary  

SECTION 160APHF   SUBSTANTIALLY IDENTICAL SECURITIES  

160APHF(1)   Definition.  

In this Division:

substantially identical securities
, in relation to shares, or in relation to an interest in shares, in a company (the relevant company ), means property that is fungible with, or economically equivalent to, the shares or interest.

160APHF(2)   Meanings of subsections (3) and (4) not limited by subsection (1).  

Subsections (3) and (4) do not limit, by implication, the meaning of subsection (1).

160APHF(3)   Substantially identical securities in relation to shares.  

The following are taken to be substantially identical securities in relation to shares (the relevant shares ) in the relevant company:

(a) other shares in the relevant company that are of the same class as the relevant shares;

(b) other shares in the relevant company that are of a different class from the relevant shares where there is no material difference between those classes of shares or the other shares are exchangeable at a fixed rate for the relevant shares;

(c) shares in another company that holds predominantly shares in the relevant company of the same class as shares of any of the kinds mentioned in paragraphs (a) and (b);

(d) shares in another company that are, or other property that is, exchangeable at a fixed rate for the relevant shares or for shares in the relevant company of any of the kinds mentioned in paragraphs (a) and (b);

(e) a vested and indefeasible interest in a trust whose assets consist predominantly of shares in the relevant company of the same class as shares of any of the kinds mentioned in paragraphs (a) and (b);

(f) an interest in a partnership whose assets consist predominantly of shares in the relevant company of the same class as shares of any of the kinds mentioned in paragraphs (a) and (b).

160APHF(4)   Substantially identical securities in relation to interests in shares.  

The following interests are taken to be substantially identical securities in relation to an interest in shares (the relevant shares ) in the relevant company:

(a) a vested and indefeasible interest in a trust whose assets consist predominantly of:

(i) other shares in the relevant company that are of the same class as the relevant shares; or

(ii) other shares in the relevant company that are of a different class from the relevant shares where there is no material difference between those classes of shares or the other shares are exchangeable at a fixed rate for the relevant shares;

(b) an interest in a partnership whose assets consist predominantly of:

(i) other shares in the relevant company that are of the same class as the relevant shares; or

(ii) other shares in the relevant company that are of a different class from the relevant shares where there is no material difference between those classes of shares or the other shares are exchangeable at a fixed rate for the relevant shares;

(c) if the interest in the relevant shares is a unit in a unit trust - any other unit of the same class in the trust;

(d) if the interest in the relevant shares is a vested and indefeasible interest in the whole of a share in the relevant company - that share or any other share of the same class;

(e) if the interest in the relevant shares is a vested and indefeasible interest in part of a share in the relevant company - any other vested and indefeasible interest in a corresponding part of another share in the relevant company of the same class;

(f) if the interest in the relevant shares is exchangeable at a fixed rate for another interest in shares, or for shares, in the relevant company - the other interest or the shares, as the case may be.

160APHF(5)   Commissioner may determine an interest in the corpus of a trust to be vested and indefeasible.  

If:

(a) a person has an interest in so much of the corpus of a trust as is comprised by shares or an interest in shares; and

(b) apart from this subsection, the interest in the trust would not be a vested or indefeasible interest; and

(c) the Commissioner considers that the interest in the trust should be treated as being vested and indefeasible, having regard to:

(i) the circumstances in which the interest is capable of not vesting or the defeasance can happen; and

(ii) the likelihood of the interest not vesting or the defeasance happening; and

(iii) the nature of the trust; and

(iv) any other matter the Commissioner thinks relevant;

the Commissioner may determine that the interest in the trust is to be taken to be vested and indefeasible.

160APHF(6)   Effect of determination.  

A determination made under subsection (5) has effect according to its terms.