Section CB 26 — Income Tax Act 2007: Disposal of certain shares by portfolio investment entities

CB 26 Disposal of certain shares by portfolio investment entities When this section applies (1) This section applies when— (a) the income from the disposal by a person (the entity ) of the share is excluded income under section CX 55 (Proceeds from disposal of investment shares); and (b) a dividend from the share is— (i) declared before the disposal; and (ii) paid to a holder of the share who, after the disposal, becomes entitled to the dividend. Income (2) The entity is treated as deriving an amount of income calculated using the formula— (shares at declaration – shares on distribution) × dividend. Definition of items in formula (3) In the formula,— (a) shares at declaration is the number of shares held by the entity when the dividend is declared: (b) shares on distribution is the number of shares for which the entity derives a dividend: (c) dividend is the amount of the dividend per share or, for a share issued by an ICA company, the amount of the dividend per share that is not fully imputed. Positive result (4) The result of the formula must be a positive amount. Defined in this Act: amount , company , dividend , excluded income , fully imputed , ICA company , income , pay , portfolio investment entity , share Compare: 2007 No 97 s CB 26 Section CB 26: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 8(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).