Private ruling: Assessable income
Date of advice: 5 December 2019
Published: February 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the dividend received by X assessable to it when it is received? | A1: No. The Commissioner considers that the beneficial ownership in the shares transferred upon contract formation. X held the dividend amount for the benefit of Y. | Q2: Is the sum received from the X to Y assessable as income of Y? | A2: Yes. Having reviewed the facts and circumstances, the Commissioner considers that Y was absolutely and presently entitled to the amount when it was received by X.

Relevant facts and circumstances: X requested the necessary documents to dispose of shares to Y. Y paid the consideration for the shares. The price reflects the closing value of the shares on the date that the form was completed. There was an error on the relevant documents. The error was corrected and the forms returned for processing. The dividend was declared and the shares became ex-dividend. The transfer of shares was processed after the dividend date. X received a dividend from the shares and transferred the amount to Y.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1936 section 95 | Income Tax Assessment Act 1936 section 97