OB 61 ICA benchmark dividend rules
When this section applies

(1)

This section applies when an ICA company pays a dividend on more than 1 occasion during a tax year. Subsection (2) overrides this subsection.

Exclusions

(2)

This section does not apply to the following dividends:

(a)

a dividend that is the subject of an election by a statutory producer board under sections OB 73 to OB 75:

(b)

a dividend that is the subject of an election by a co-operative company under sections OB 78 to OB 80:

(bb)

an amount treated as a dividend under section CB 32C (Dividend income for first year of look-through company):

(c)

a dividend paid when the company is not an ICA company.

Benchmark dividend

(3)

The first dividend of the tax year is the benchmark dividend.

Same imputation ratio

(4)

The imputation ratio of a dividend paid after the benchmark dividend must be the same as the imputation ratio of the benchmark dividend. This subsection is modified by section OZ 9 (Benchmark dividends: ratio change).

Breach of imputation ratio

(5)

A breach of subsection (4) gives rise to an amount of an imputation debit under section OB 43 (table O2: imputation debits, row 16 (breach of imputation ratio)) calculated using the formula in section OB 43(1).

Ratio change declaration

(6)

An ICA company may notify the Commissioner that the dividend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advantage) apply. The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner allows. For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (5).

Consolidated imputation group[Repealed]

(7)

[Repealed]

Group debit

(8)

Under section OP 2(2) (When credits and debits arise only in group accounts), a breach of an imputation ratio alternatively gives rise to an imputation debit under section OP 43 (Consolidated ICA breach of imputation ratio) (table O20: imputation debits of consolidated imputation groups, row 17 (breach of imputation ratio)) if the company is part of a consolidated imputation group.

Treatment of group dividends

(9)

In the application of this section to a consolidated imputation group, a dividend paid between group companies is disregarded.

Defined in this Act: arrangement, benchmark dividend, Commissioner, company, consolidated imputation group, co-operative company, dividend, ICA company, imputation debit, imputation ratio, notify, pay, statutory producer board, tax advantage, tax year

Compare: 2004 No 35 ss ME 8(2), (3), ME 14(2)

Section OB 61(2)(bb): inserted, on 30 March 2017, by section 205 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section OB 61(4): amended, on 1 October 2010, by section 12 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OB 61(7) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 397(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 61(7): repealed (with effect on 1 April 2008), on 6 October 2009, by section 397(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).