This paper discusses how company were formed and are now formed. Then it goes into detail about dividends streaming, distributions of share capital, redeemable preference shares, bonus shares, capital streaming, and dividend substitution.
Division 7A of Part III of the Income Tax Assessment Act 1936 (ITAA) contains provisions that would tax, as unfranked dividends, the amount of certain payments, loans and debts forgiven by a private company to its shareholders or their associates. The provisions generally apply from 4 December 1997. The year ending 30 June 1999 is the first full income year in which the provisions will have applied. Minimum requirements, to avoid the provisions deeming amounts to be dividends in the 1999 year, will apply for the first time. A purpose of this paper is to consider these requirements to assist affected taxpayers and their advisors to determine what needs to be done by 30 June 1999 to avoid, where possible, a dividend arising under Division 7A.
This paper discusses the new changes of legislation that were going through Parliament at the time. Some of these related to self managed funds, prohibition of acquisition of assets, investment provisions, in-house assets, and transitional provisions.
Exploring Trusts: Trust Losses and Family Trust Elections
The law governing the taxation of trust income has been changed in significant respects in recent times. Further changes have been foreshadowed in draft bills and policy statements. The relevant legislation (or proposed legislation) is often complex and more readily mastered, or at the least, managed by reference to practical applications. The hypothetical case study at the end of this paper is designed to provide a simple practical backdrop to the operation of the trust loss and family trust election provisions.