Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p23
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 23/29)
Character Range: 2900161–2902990

Act were instead a reference to this section).

Application of this section to non‑share equity interests
 (3) This section:
 (a) applies to a *non‑share equity interest in the same way as it applies to a *membership interest; and
 (b) applies to an *equity holder in the same way as it applies to a *member.

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

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; or
 (c) a *debt interest in the company changes at a particular time (the change time) to an *equity interest in the company because of subsection 974‑110(1) or (2); or
 (d) the following conditions are satisfied in relation to an interest in the company:
 (i) immediately before subsection 974‑75(4) ceases to have effect, the interest is taken to be a debt interest in the company because of that subsection;
 (ii) the interest is an equity interest in the company at the time (the change time) that is immediately after that cessation;
 (iii) subsection 974‑75(6) does not apply to the interest in relation to the income year that includes the change time; or
 (e) the following conditions are satisfied in relation to an interest in the company:
 (i) subsection 974‑75(6) applies to the interest in relation to a particular income year;
 (ii) that subsection does not apply to the interest in relation to the next income year;
 (iii) the interest is an equity interest in