Document ID: chunk:federal_register_of_legislation:C2004A00898:clause:1_33:p1
Version: federal_register_of_legislation:C2004A00898
Segment Type: clause
Provision Reference: sch 1 cl 33 (pt 1/3)
Character Range: 16676–19490

33  Part 3‑5 (link note after the heading)
Repeal the link note, substitute:

[The next Division is Division 164.]

Division 164—Non‑share capital accounts for companies

Guide to Division 164

164‑1  What this Division is about

      A company that issues non‑share equity interests will have a notional account called a non‑share capital account. This account records contributions to the company in relation to those non‑share equity interests and returns made by the company of those contributions.
      A non‑share distribution that represents a return of contributions is not taxed as a dividend (subject to the anti‑avoidance provisions dealing with dividend substitution). In certain circumstances a company may use its share capital account as the source for such distributions.

Table of sections

Operative provisions

164‑5 Object
164‑10 Non‑share capital account
164‑15 Credits to non‑share capital account
164‑20 Debits to non‑share capital account

[This is the end of the Guide.]

Operative provisions

164‑5  Object

 (1) This Division provides for the *non‑share capital account through which a company records contributions made to it in respect of *non‑share equity interests and returns by it of those contributions.

 (2) This allows a *non‑share distribution to be characterised as either:
 (a) a *non‑share dividend; or
 (b) a *non‑share capital return.

164‑10  Non‑share capital account

 (1) A company has a non‑share capital account if:
 (a) the company issues a *non‑share equity interest in the company on or after 1 July 2001; or
 (b) the company has issued a non‑share equity interest in the company before 1 July 2001 that is still in existence on 1 July 2001.

 (2) The account continues in existence even if the company ceases to have any *non‑share equity interests on issue.

 (3) The balance of the account cannot fall below nil.

 (4) The only credits and debits that may be made to the account are those provided for in sections 164‑15 and 164‑20.

164‑15  Credits to non‑share capital account

 (1) If the company issues a *non‑share equity interest in the company on or after 1 July 2001, there is a credit to the *non‑share capital account equal to:
where:

amount received is the market value, when it is provided, of the consideration the company receives for the issue of the interest.

share capital account credit is the amount of any credit made to the company's share capital account in respect of the issue of the interest.

Note: The issue of a non‑share equity interest can give rise to a credit to the company's share capital account if the interest consists, for example, of a stapled security that includes a share in the company's capital.

 (2) If a *debt interest in the company changes at a particular time to an *equity interest in the company