Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017

22 Section CD 43 amended (Available subscribed capital (ASC) amount)

(1)

After section CD 43(6), insert:

When subsection (6D) applies

(6B)

Subsection (6D) applies for a company (the calculation company) for which the calculation in subsection (1) is being performed if—

(a)

section EW 46C(1)(a) or (b) (Consideration when debt forgiven within economic group) applies to a creditor and debtor that are in the same wholly-owned group of companies as the calculation company; and

(b)

the creditor is a non-resident company; and

(c)

section EW 46C(3) does not apply; and

(d)

the calculation company is the debtor, or the calculation company holds, before section YC 4 (Look-through rule for corporate shareholders) is applied to the calculation company, voting interests or, if a market value exists for a company that is part of the wholly-owned group of companies, market value interests, in the debtor.

When subsection (6D) applies

(6C)

Subsection (6D) also applies if section EW 46C(1)(c) applies to a creditor or single creditor group under that section, and the company for which the calculation in subsection (1) is being performed (the calculation company)—

(a)

is the creditor’s debtor, to whom section EW 46C(1)(c) applies:

(b)

has, before the application of section YC 4, either voting interests in the creditor’s debtor, to whom section EW 46C(1)(c) applies, or market value interests in the creditor’s debtor, to whom section EW 46C(1)(c) applies, if a market value circumstance exists for the debtor.

Subscriptions amount: debt forgiven within economic group

(6D)

For the calculation company, the subscriptions amount is treated as including the amount of debt to which section EW 46C(5) applies for the creditor, for the class of shares that the creditor has the most voting interests for, or, if the creditor is the single creditor group under section EW 46C(1)(c), for the class of shares for which a member has the most voting interests. The maximum subscriptions amount included for an amount of debt for a calculation company is—

(a)

if the calculation company is the debtor, the amount of debt:

(b)

if the calculation company is not the debtor, the amount of debt multiplied by 1 of the following interests, determined before the application of section YC 4:

(i)

the calculation company’s voting interests in the creditor’s debtor; or

(ii)

the calculation company’s market value interest in the creditor’s debtor, if there is a market value circumstance.

(2)

In section CD 43(7), replace the heading with Subscriptions amount: exclusions for bonus issues.

(3)

In section CD 43(7)(a), replace “applies; or” with “applies:”.

(4)

After section CD 43(7)(a), insert:

(ab)

an amount for an imputation credit attached to the dividend arising from a taxable bonus issue if subsection (6)(b) applies:

(6)

In section CD 43(27)(a), delete “or FDP credit”.

(7)

Replace section CD 43(27)(b) with:

(b)

actual ratio is the imputation ratio of the dividend (section OZ 13 (Fully credited dividends: modifying actual ratio) may apply to modify this paragraph):

(8)

In section CD 43, list of defined terms, delete “FDP”, “FDP credit”, and “FDP ratio”.

(9)

In section CD 43, list of defined terms, insert “market value circumstance”, “market value interest”, “non-resident company”, and “voting interest”.

(10)

Subsection (1) applies for a person for the 2008–09 and later income years, except for an income year before the 2015–16 income year for which the person takes a tax position in a return of income that is inconsistent with the amendment made by subsection (1).