Class Ruling CR 2022/92

What this ruling is about: 1. This Ruling sets out the income tax consequences for members of Avant Mutual Group Limited (AMGL) who receive the Retirement Reward Dividend. 2. Details of the Retirement Reward Dividend are set out in paragraphs 11 to 24 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. Who this Ruling applies to 4. This Ruling applies to you if you are a member of AMGL who: When this Ruling applies 5. This Ruling applies from 1 July 2022 to 30 June 2026. Inclusion of dividend in assessable income 6. You must include the Retirement Reward Dividend paid by AMGL in your assessable income under subparagraph 44(1)(a)(ii) of the ITAA 1936 as the dividend is a non-share dividend within the meaning given in section 974-120. Inclusion of franking credits in assessable income 7. You must include in your assessable income an amount equal to the franking credits attached to the Retirement Reward Dividend paid by AMGL (subsection 207-20(1)). Entitlement to a tax offset 8. You are entitled to a tax offset equal to the amount of the franking credit attached to the Retirement Reward Dividend paid by AMGL (subsection 207-20(2)). Imputation benefits - streaming of imputation benefits Section 204-30 9. The Commissioner will not make a determination under paragraph 204-30(3)(c) to deny the whole, or any part, of the imputation benefits received by you in relation to the Retirment Reward Dividend paid by AMGL as the conditions in subsection 204-30(1) are not present under the scheme. Section 177EA of the ITAA 1936 10. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by you in relation to the Retirement Reward Dividend paid by AMGL as the conditions in subsection 177EA(3) are not present under the scheme. 11. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 12. AMGL, a company limited by guarantee, is the head company of the AMGL income tax consolidated group formed on 1 July 2007. 13. AMGL is a mutual not-for-profit organisation, owned and operated for the benefit of its members. As at the date of this Ruling, AMGL has Voting Members and Student Members. 14. Article 12.1 of AMGL's Constitution permits the Directors of AMGL to declare or determine that a dividend is payable to Voting Members. A Voting Member's entitlement to dividends will be based upon their financial contributions to AMGL's successes. 15. Any dividends will be sourced from the non-mutual (taxable) surplus of the entities in the AMGL income tax consolidated group. 16. It is possible that some Voting Members will be non-residents for Australian tax purposes. AMGL does not maintain information regarding the tax residency of its members. Retirement Reward Dividend 17. AMGL proposes to pay Retirement Reward Dividends to Voting Members in accordance with the Avant Retirement Reward Plan. The Retirement Reward Dividend is designed to reward Voting Members who contributed to AMGL's financial success over time and is deferred until the retirement of a Voting Member from medical practice. 18. A Voting Member at the Record Date will be considered eligible to receive a Retirement Reward Dividend if the Voting Member: 19. In this Ruling, such a Voting Member is hereinafter referred to as a Retiring Voting Member. 20. 'Permanently retiring' means that you are no longer paid to practice in any capacity as a medical practitioner and have no intention to be paid to practice in the future. 21. 'Permanent disability' means that you are no longer able to practice medicine in any capacity in the foreseeable future. 22. An ex gratia payment equivalent to the amount of the Retirement Reward Dividend may be paid to the estate of a Retiring Voting Member who dies during the 12 months ending on the Record Date. This Ruling does not apply to such a payment. 23. The declaration of the Retirement Reward Dividend is at the sole discretion of the AMGL Board. 24. The Record Date will be 30 June each year or such other date determined by the AMGL Board. The Retirement Notification Date will be 31 July each year. The payment date for Retirement Reward Dividends, if any, is expected to be in October each year. Other matters 25. This Ruling is made on the basis that: Commissioner of Taxation 19 October 2022 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Class of entities or scheme: 11. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 12. AMGL, a company limited by guarantee, is the head company of the AMGL income tax consolidated group formed on 1 July 2007. 13. AMGL is a mutual not-for-profit organisation, owned and operated for the benefit of its members. As at the date of this Ruling, AMGL has Voting Members and Student Members. 14. Article 12.1 of AMGL's Constitution permits the Directors of AMGL to declare or determine that a dividend is payable to Voting Members. A Voting Member's entitlement to dividends will be based upon their financial contributions to AMGL's successes. 15. Any dividends will be sourced from the non-mutual (taxable) surplus of the entities in the AMGL income tax consolidated group. 16. It is possible that some Voting Members will be non-residents for Australian tax purposes. AMGL does not maintain information regarding the tax residency of its members. | Retirement Reward Dividend: 17. AMGL proposes to pay Retirement Reward Dividends to Voting Members in accordance with the Avant Retirement Reward Plan. The Retirement Reward Dividend is designed to reward Voting Members who contributed to AMGL's financial success over time and is deferred until the retirement of a Voting Member from medical practice. 18. A Voting Member at the Record Date will be considered eligible to receive a Retirement Reward Dividend if the Voting Member: 19. In this Ruling, such a Voting Member is hereinafter referred to as a Retiring Voting Member. 20. 'Permanently retiring' means that you are no longer paid to practice in any capacity as a medical practitioner and have no intention to be paid to practice in the future. 21. 'Permanent disability' means that you are no longer able to practice medicine in any capacity in the foreseeable future. 22. An ex gratia payment equivalent to the amount of the Retirement Reward Dividend may be paid to the estate of a Retiring Voting Member who dies during the 12 months ending on the Record Date. This Ruling does not apply to such a payment. 23. The declaration of the Retirement Reward Dividend is at the sole discretion of the AMGL Board. 24. The Record Date will be 30 June each year or such other date determined by the AMGL Board. The Retirement Notification Date will be 31 July each year. The payment date for Retirement Reward Dividends, if any, is expected to be in October each year. | Other matters: 25. This Ruling is made on the basis that: Commissioner of Taxation 19 October 2022 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Ruling: 1. This Ruling sets out the income tax consequences for members of Avant Mutual Group Limited (AMGL) who receive the Retirement Reward Dividend. 2. Details of the Retirement Reward Dividend are set out in paragraphs 11 to 24 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. | Who this Ruling applies to: 4. This Ruling applies to you if you are a member of AMGL who: | When this Ruling applies: 5. This Ruling applies from 1 July 2022 to 30 June 2026. | Inclusion of dividend in assessable income: 6. You must include the Retirement Reward Dividend paid by AMGL in your assessable income under subparagraph 44(1)(a)(ii) of the ITAA 1936 as the dividend is a non-share dividend within the meaning given in section 974-120. | Inclusion of franking credits in assessable income: 7. You must include in your assessable income an amount equal to the franking credits attached to the Retirement Reward Dividend paid by AMGL (subsection 207-20(1)). | Entitlement to a tax offset: 8. You are entitled to a tax offset equal to the amount of the franking credit attached to the Retirement Reward Dividend paid by AMGL (subsection 207-20(2)). | Section 204-30: 9. The Commissioner will not make a determination under paragraph 204-30(3)(c) to deny the whole, or any part, of the imputation benefits received by you in relation to the Retirment Reward Dividend paid by AMGL as the conditions in subsection 204-30(1) are not present under the scheme. | Section 177EA of the ITAA 1936: 10. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by you in relation to the Retirement Reward Dividend paid by AMGL as the conditions in subsection 177EA(3) are not present under the scheme. 11. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 12. AMGL, a company limited by guarantee, is the head company of the AMGL income tax consolidated group formed on 1 July 2007. 13. AMGL is a mutual not-for-profit organisation, owned and operated for the benefit of its members. As at the date of this Ruling, AMGL has Voting Members and Student Members. 14. Article 12.1 of AMGL's Constitution permits the Directors of AMGL to declare or determine that a dividend is payable to Voting Members. A Voting Member's entitlement to dividends will be based upon their financial contributions to AMGL's successes. 15. Any dividends will be sourced from the non-mutual (taxable) surplus of the entities in the AMGL income tax consolidated group. 16. It is possible that some Voting Members will be non-residents for Australian tax purposes. AMGL does not maintain information regarding the tax residency of its members. | Retirement Reward Dividend: 17. AMGL proposes to pay Retirement Reward Dividends to Voting Members in accordance with the Avant Retirement Reward Plan. The Retirement Reward Dividend is designed to reward Voting Members who contributed to AMGL's financial success over time and is deferred until the retirement of a Voting Member from medical practice. 18. A Voting Member at the Record Date will be considered eligible to receive a Retirement Reward Dividend if the Voting Member: 19. In this Ruling, such a Voting Member is hereinafter referred to as a Retiring Voting Member. 20. 'Permanently retiring' means that you are no longer paid to practice in any capacity as a medical practitioner and have no intention to be paid to practice in the future. 21. 'Permanent disability' means that you are no longer able to practice medicine in any capacity in the foreseeable future. 22. An ex gratia payment equivalent to the amount of the Retirement Reward Dividend may be paid to the estate of a Retiring Voting Member who dies during the 12 months ending on the Record Date. This Ruling does not apply to such a payment. 23. The declaration of the Retirement Reward Dividend is at the sole discretion of the AMGL Board. 24. The Record Date will be 30 June each year or such other date determined by the AMGL Board. The Retirement Notification Date will be 31 July each year. The payment date for Retirement Reward Dividends, if any, is expected to be in October each year. | Other matters: 25. This Ruling is made on the basis that: Commissioner of Taxation 19 October 2022 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).




What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.


Legislative references: ITAA 1936 6(1) ITAA 1936 44(1)(a)(ii) ITAA 1936 177EA ITAA 1936 177EA(3) ITAA 1936 177EA(5)(b) ITAA 1997 164-10 ITAA 1997 202-40 ITAA 1997 202-45 ITAA 1997 204-30 ITAA 1997 204-30(1) ITAA 1997 204-30(3)(c) ITAA 1997 207-20(1) ITAA 1997 207-20(2) ITAA 1997 215-20 ITAA 1997 Div 974 ITAA 1997 974-120 ITAA 1997 975-300 ITAA 1997 995-1(1) Corporations Act 2001 254SA Corporations Act 2001 254T Corporations Act 2001 Pt 2J.1