Section OB 45 — Income Tax Act 2007: ICA redemption debit

OB 45 ICA redemption debit Debit (1) An ICA company has an imputation debit for the amount of a redemption debit. When redemption debit arises (2) A redemption debit arises when— (a) a company that is not an Australian ICA company is— (i) the manager of a unit trust; or (ii) the trustee or manager of a group investment fund; and (b) the company derives a dividend on the redemption or cancellation of— (i) a unit issued by the unit trust; or (ii) an interest of an investor in the group investment fund; and (c) the company has acquired the unit or interest in the ordinary course of its management activities for the unit trust or group investment fund; and (d) the unit or interest had been acquired by the company on the same terms as those offered to the investors in the unit trust or group investment fund. Calculating amount (3) The debit is for the greater of the amounts described in subsections (4) and (6) calculated for the income year in which the company derived the dividend referred to in subsection (2)(b). First amount (4) The first amount is calculated using the formula— credits attached – imputation debits. Definition of items in formula (5) In the formula in subsection (4),— (a) credits attached is the total amount of all imputation credits and FDP credits attached to dividends derived in the circumstances set out in subsection (2) by the company for the income year: (b) imputation debits is the total amount of all imputation debits arising for the income year under— (i) section OB 41 in the company’s imputation credit account; or (ii) section OP 42 (Consolidated ICA debit for loss of shareholder continuity) in the imputation credit account of the consolidated imputation group of which the company is part. Second amount (6) The second amount is calculated using the formula— total dividends × (tax liability − debits). taxable income Definition of items in formula (7) In the formula in subsection (6),— (a) total dividends is the total amount of all dividends derived in the circumstances set out in subsection (2), including imputation credits and FDP credits attached to the dividends: (b) taxable income is the taxable income of the company for the income year in which the dividends are derived: (c) tax liability is the company’s income tax liability for the income year: (d) debits is the imputation credits attached to the dividends that have been cancelled by an imputation debit arising during the income year under — (i) section OB 41 in the company’s imputation credit account; or (ii) section OP 42 in the imputation credit account of the consolidated imputation group of which the company is part. Table references (8) The table references are as follows: (a) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 18 (redemption debit): (b) the imputation debit in subsection (5)(b)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): (c) the imputation debit in subsection (5)(b)(ii) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity): (d) the imputation debit in subsection (7)(d)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): (e) the imputation debit in subsection (7)(d)(ii) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity). Debit date (9) The debit date is the date on which the company or the group’s nominated company files the return of income for the income year in which the dividend is derived. Defined in this Act: amount , Australian ICA company , company , consolidated imputation group , dividend , FDP credit , group investment fund , ICA company , imputation credit , imputation credit account , imputation debit , income , income tax , income tax liability , income year , investor , nominated company , return of income , shareholder , tax , taxable income , trustee , unit trust , Compare: 2004 No 35 s ME 41