Private ruling: Capital Reduction
Published: January 2013
Ruling period: 1 July 2012 - 30 June 2013
Date scheme commenced: N/A

Ruling: Q1: Will the share capital account become tainted under Division 197 of the Income Tax Assessment Act 1997 as a result of a proposed capital reduction? | A1: No

Relevant facts and circumstances: Aus Ltd, an Australian tax resident company undertakes transfer of amounts between two share capital accounts.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Division 197

Reasons for decision: Summary: Applying subsection 975-300(2) of the ITAA 1997, both the share capital accounts are taken to be a single account. As both accounts are treated as a single share capital account, subsection 197-5(1) of the ITAA 1997 does not apply as there is no amount being transferred to a company's share capital account from another of the company's account.

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