Skip to main content
shopping_cart

Your shopping cart is empty

20 Apr 11 Share buy-back amount not a dividend - Consolidated Media Holdings

The Federal Court (Emmett J) has held that a payment of $1,000,000,000 made by Crown Melbourne Limited ("Crown") to the taxpayer for the buy-back of shares in Crown held by the taxpayer was not a dividend for the purposes of s 159GZZZP ITAA 1936, and was not therefore rebatable, because it had been debited against amounts standing to the credit of Crown's share capital amount.

The taxpayer argued that the payment had not been debited against amounts standing to the credit of Crown's share capital amount, because it had been debited to an account entitled "Share Buy-Back Reserve Account" and it was the only entry in that account. However, the Court held that that account was part of the account kept by Crown of its share capital within the meaning of s 6D ITAA 1936.

Accordingly, the Court held that the transaction resulted in an assessable capital gain of $402,461,564 (the cost base in the shares being $597,538,436), rather than a dividend: Consolidated Media Holdings Limited v FCT [2011] FCA 367 (Federal Court, Emmett J, 14 April 2011).

 


Media Release Search
Keywords
Eg. TD 2005/D52 ALL words EXACT phrase WITHOUT words Date range
From To