Document ID: chunk:federal_register_of_legislation:C2024C00267:section:8:p44
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 8 (pt 44/48)
Character Range: 336853–339565

197‑10  Subdivision applies to companies whose share capital accounts were tainted when old Division 7B was closed off
  This Subdivision applies to a company if, immediately before the old Division 7B close‑off day, the company's share capital account was tainted under old Division 7B.

197‑15  Account taken to have ceased to be tainted when old Division 7B was closed off
 (1) The company's share capital account is taken to have ceased to be tainted under old Division 7B at the start of the Division 7B close‑off day.
 (2) No liability to untainting tax, and no franking debit, arises under old Division 7B in relation to the share capital account being taken to have ceased to be tainted.

197‑20  After introduction day, account taken to have become tainted under new Division 197 to extent of previous tainting
 (1) Immediately after the introduction day, the company's share capital account is taken to become tainted under new Division 197 as if:
 (a) the company had, at that time, transferred an amount (the notionally transferred amount) to its share capital account from another of its accounts that equalled the tainting amount (the old Division 7B tainting amount), within the meaning of old Division 7B, in relation to the share capital account immediately before the old Division 7B close‑off day; and
 (b) none of the exclusions in sections 197‑10 to 197‑40 of new Division 197 applied, to any extent, in relation to the notionally transferred amount.
 (2) No franking debit arises under Subdivision 197‑B of new Division 197 in relation to the notionally transferred amount.

197‑25  Special provisions if company chooses to untaint after introduction day
 (1) This section applies if, after the introduction day, the company chooses under section 197‑55 of new Division 197 to untaint its share capital account.

Working out the amount of section 197‑60 untainting tax
 (2) For the purpose of section 197‑60 of new Division 197, the tainting amount at the time of the choice to untaint is taken to consist of:
 (a) the amounts (the old Division 7B tainting amount components) that made up the old Division 7B tainting amount; and
 (b) any amounts to which new Division 197 applies that have been transferred to the company's share capital account since the introduction day and before the choice to untaint is made.
Note 1: The company will not be liable to untainting tax if it is covered by subsection (5).
Note 2: If the company is covered by subsection (6), the old Division 7B tainting amount components will not be included in the tainting amount for the purpose of section 197‑60.
 (3) For the purpose of section 197‑60 of new Division 197, a reference to the section 197‑45 franking