Section CD 41 — Income Tax Act 2007: Adjustment if amount repaid later

CD 41 Adjustment if amount repaid later When released debt repaid (1) If the release by a company of a shareholder’s obligation to pay money to the company has been treated as a dividend and the released amount is later repaid to the company, this section applies to the extent necessary to ensure that— (a) the dividend is disregarded for the purposes of this Act; and (b) the resulting refunds are made. When close company expenditure repaid (2) If any expenditure of a close company that shareholders in the company believed on reasonable grounds was only for the benefit of the company is nevertheless a dividend and the expenditure is later repaid to the company, this section applies to the extent necessary to ensure that— (a) the dividend is disregarded for the purposes of this Act; and (b) the resulting refunds are made. Amendment of assessments (3) Section 113B of the Tax Administration Act 1994 requires the Commissioner to amend assessments if given notice of the repayment. Refunds (4) If the Commissioner is given notice of the repayment, the Commissioner must refund any relevant tax of the shareholder. Relationship with sections RM 2 to RM 6 (5) The refund is made despite sections RM 2 to RM 6 (which relate to refunds of excess tax), but subject to the other provisions of this Act. Repayment of pre-1992 loans (6) Subsection (1) also applies to the repayment of an amount treated as a dividend under section 4(1)(b) of the Income Tax Act 1976 (as it applied before 1 April 1992 to give the Commissioner a discretion to treat loans as dividends), as if the amount repaid were a released amount that is repaid. Defined in this Act: amount , assessment , close company , Commissioner , company , dividend , notice , pay , shareholder , tax Compare: 2004 No 35 s CD 30