Private ruling: On-market share buy-back
Published: October 2011

Ruling: Questions at issue | The ruling concerned whether: | 1. the proposed on-market share buy-back (Proposed Transaction) consist solely of on-market purchases for the purposes of Division 16K of the Income Tax Assessment Act 1936 (ITAA 1936). | 2. a franking debit will be included in Company A's franking account under Item 9 of subsection 205-30(1) of the Income Tax Assessment Act 1997 (ITAA 1997) as a result of the Proposed Transaction. | 3. Company A will be liable for franking deficit tax in respect of the year ended 30 June 2012 as a result of the Proposed Transaction. | 4. the Commissioner will make a determination under subsection 45C(3) of the ITAA 1936 in relation to the on-market share buy-back. | 5. Company A's share capital account will be tainted under Division 197 of the ITAA 1997 as a result of the Proposed Transaction. | The Commissioner ruled that: | 1. The Proposed Transaction consists solely of on-market purchases for the purposes of Division 16K of the ITAA 1936. | 2. A franking debit will not be included in Company A's franking account under Item 9 of subsection 205-30(1) of the ITAA 1997 as a result of the Proposed Transaction. | 3. Company A will not be liable for franking deficit tax in respect of the year ended 30 June 2012 as a result of the Proposed Transaction. | 4. The Commissioner will not make a determination under subsection 45C(3) of the ITAA 1936 in relation to the on-market share buy-back. | 5. Company A's share capital account will not be tainted under division 197 of the ITAA 1997 as a result of the Proposed Transaction.




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