Taxation Determination TD 93/203







Note: This is a consolidated version of this document. Refer to the Legal Database ( www.ato.gov.au/law ) to check its currency and to view the details of all changes. | 1. No. Section 121EC of the Income Tax Assessment Act 1936 sets out the meaning of the term "OBU [1] resident-owner money". It is money 'paid to the OBU by a resident owner of the OBU by way of a subscription for, or a call on, shares in the OBU ...' As the subsidiary is not an OBU at the time of the share subscription, section 121EC can have no application. | 2. As share capital subscribed to a subsidiary before it becomes an OBU is not "OBU resident-owner money", section 121EK, which deems interest to apply to 90% of certain OBU resident-owner money has no application to that capital. | 3. As the share subscription will constitute "non-OB money" as defined in section 121C, any assessable income derived from the use of that money cannot be "assessable OB income" for the purposes of subsection 121EE(2). | Commissioner of Taxation 28/10/93 | Footnotes: Previously issued as Draft TD 93/D197


Legislative references: ITAA 121EC; ITAA 121EK; ITAA 121EE; ITAA 121C
Subject references: Offshore banking; OBUs; OBU resident-owner money; deemed interest; non-OB money; assessable OB income