Private ruling: In-specie distribution of Securities
Published: October 2013

Ruling: Questions at issue | In order to protect the privacy and commercial in-confidence component of this private binding ruling the following summary is provided. | The ruling concerned the following | Issue 1 | 1. Will the Commissioner make a determination under subsection 45C(3) of the Income Tax Assessment Act 1936 (ITAA 1936) and thereby impose a debit to the franking account of the taxpayer under subsection 45C(3) in respect of the distribution? | Issue 2 | 2. Does the Trust cease to be an employee share trust within the meaning of subsection 130-85(4) of the Income Tax assessment Act 1997 (ITAA 1997), where the trustee receives and sells securities? | Issue 3 | 3. The Commissioner was asked questions regarding whether certain transactions would cause the taxpayer's share capital account to become tainted under section 197-5(1) of the ITAA 1997? | The Commissioner has ruled that: | Issue 1 | 1. No, the Commissioner will not make a further determination under subsection 45C(3) of the ITAA 1936 that the whole or any part of the distribution will be paid under a scheme for the purpose of avoiding franking debits arising in relation to the distribution from the taxpayer. | Issue 2 | 2. No. The identified sale process in respect of the disposal of the securities will not of itself result in the Trust ceasing to satisfy the definition of an employee share trust. | Issue 3 | 3. No.