Document ID: chunk:federal_register_of_legislation:C2012C00388:clause:4_1:p1
Version: federal_register_of_legislation:C2012C00388
Segment Type: clause
Provision Reference: sch 4 cl 1 (pt 1/10)
Character Range: 11048–14080

1  At the end of Part 3‑5
Add:

Division 197—Tainted share capital accounts

Table of Subdivisions

 Guide to Division 197
197‑A What transfers into a company's share capital account does this Division apply to?
197‑B Consequence of transfer: franking debit arises
197‑C Consequence of transfer: tainting of share capital account

Guide to Division 197

197‑1  What this Division is about

      This Division:

                (a) applies to certain amounts transferred to a company's share capital account (see Subdivision 197‑A); and
                (b) provides for a franking debit to arise if such an amount is transferred to the share capital account (see Subdivision 197‑B); and
                (c) provides for the tainting of the share capital account if such an amount is transferred, for how the account may be untainted, and for consequences that flow from untainting the account (see Subdivision 197‑C).

Subdivision 197‑A—What transfers into a company's share capital account does this Division apply to?

Table of sections

197‑5 Division generally applies to an amount transferred to share capital account from another account
197‑10 Exclusion for amounts that could be identified as share capital
197‑15 Exclusion for amounts transferred under debt/equity swaps
197‑20 Exclusion for amounts transferred leading to there being no shares with a par value—non‑Corporations Act companies
197‑25 Exclusion for transfers from option premium reserves
197‑30 Exclusion for transfers made in connection with demutualisations of non‑insurance etc. companies
197‑35 Exclusion for transfers made in connection with demutualisations of insurance etc. companies
197‑40 Exclusion for post‑demutualisation transfers relating to life insurance companies

197‑5  Division generally applies to an amount transferred to share capital account from another account

 (1) Subject to subsection (2), this Division applies to an amount (the transferred amount) that is transferred to a company's *share capital account from another of the company's accounts, if the company was an Australian resident immediately before the time of the transfer.

Note: If a company has 2 or more share capital accounts, those accounts are taken to be a single account (see subsection 975‑300(2)).

 (2) The other provisions of this Subdivision may stop this Division from applying to some or all of the transferred amount. If those other provisions stop this Division from applying to only some of the transferred amount, this Division (other than this Subdivision) applies to the balance of the transferred amount as if only that balance of the amount had been transferred to the company's *share capital account.

197‑10  Exclusion for amounts that could be identified as share capital

  This Division does not apply to the transferred amount if it could, at all times before the transfer, be identified in the books of the company as an amount of share capital.

197‑15  Exclusion for amounts transferred under debt/equity swaps

 (1) Subject