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Buy-backs of shares and non-share equity interests.

Publication date: 30 Jan 12 | Source: CCH TAX WEEK

Issue: Issue 3 19 Jan 2012

Pages: pp. 1-4


A purchase by a company of a share or non-equity interest in itself is subject to specific tax rules. The tax consequences depend on whether the purchase is an off-market or on market buy-back. These rules apply to determine the consideration received by the shareholder for the buy-back, the capital and dividend components of the buy-back price, franking consequences and implications associated with the buy back consideration.Exposure draft legislation and explanatory material to rewrite1 and reform the rules relating to a buy-back of shares and non-share equity interests was released by the Australian Treasury on 20 October 2011 for public comment — Exposure Draft Tax Laws Amendment (2011 Measures No 9) Bill 20112 (Exposure Draft Legislation). These reforms implement the recommendations of the Board of Taxation in its June 2008 report Review of the taxation treatment of off-market share buy-backs (the Buy Back Report). Submissions on the Exposure Draft Legislation closed on 2 December 2011.

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Author profile

Karen Payne CTA
Karen was appointed Inspector-General of Taxation & Taxation Ombudsman commencing on 6 May 2019. She leads the Taxation Ombudsman complaints management service for taxpayers and advisers and the Inspector-General of Taxation’s review and public reporting function, both of which are directed at improving the tax administration system for all taxpayers. Karen was previously a Member of the Board of Taxation as well as the inaugural Chief Executive Officer of the Board of Taxation. She was formerly a partner with MinterEllison, specialising in corporate and international tax for mergers and acquisitions, and capital raising for the financial services, mining, energy, and utilities sectors. She brings a wealth of experience and extensive networks to the role of Inspector-General having worked with a range of government and private stakeholders as well as the legal and tax profession, and many industry bodies. - Current at 23 February 2020
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