Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 216.5

  (1)   The first situation is one in which:

  (a)   the * corporate tax entity makes a * franked distribution, or a * distribution franked with an exempting credit, to a * member of the entity in respect of a * membership interest in the entity; and

  (b)   at the * distribution closing time, the member is under an obligation to transfer the membership interest to another person under a contract for the sale of the membership interest; and

  (c)   the contract:

  (i)   requires that the distribution be paid on to the other person; and

  (ii)   is entered into in the ordinary course of trading on an * approved stock exchange in Australia or elsewhere.

  (2)   The * distribution is taken to have been made to the other person as a * member of the entity (and not to the member).

Note:   As the other person is the entity receiving the distribution, there may be tax effects for the other person under Division   207 or 208.

  (3)   The * distribution referred to in paragraph   (1)(a) includes a distribution that is taken to be made as a result of one or more previous applications of this section or section   216 - 10.