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OB 25: ICA reversal of tax advantage arrangement
or “Fixing an incorrect tax advantage in your imputation credit account”
You could also call this:

“Replacing tax credits lost due to shareholder changes”

This law talks about what happens when a company loses some of its tax credits. If a company loses its shareholders, it might have to cancel some of its tax credits. But sometimes, this can cause a problem where the company loses the same credit twice. This law helps fix that problem.

If you have a tax credit that gets cancelled because you lost shareholders, you can get a new credit to replace it. This happens in three situations:

  1. If you get a refund from your tax pooling account after you lost shareholders.
  2. If you give your right to money in the tax pooling account to someone else after you lost shareholders.
  3. If the money in your tax pooling account is used to pay your tax bill after you lost shareholders.

The new credit you get is worth the same as the one you lost. You get this new credit on the day you get your refund, give away your right to the money, or when the credit shows up in your tax account with the government.

This law helps make sure you don’t lose out twice on the same tax credit just because you lost shareholders.

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Next up: OB 27: ICA non-resident withholding tax withheld

or “Credit for tax withheld from overseas income paid to Australian companies”
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Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 26ICA elimination of double debit

  1. This section applies when an imputation debit in an ICA company’s imputation credit account under section OB 41 has the effect of cancelling an imputation credit under section OB 5.

  2. The company has an imputation credit for an amount equal to the amount of the debit referred to in subsection (1), and—

  3. another debit arises under section OB 34 for a refund of the amount of the deposit on a debit date after the debit date for the debit for loss of shareholder continuity; or
    1. another debit arises under section OB 35 for a transfer to another person of the entitlement to the amount of the deposit on a debit date after the debit date for the debit for the loss of shareholder continuity; or
      1. the deposit is taken into account under section RP 19 (Transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Commissioner after the debit date for the debit for loss of shareholder continuity.

        1. The table references are as follows:

        2. the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
          1. the imputation credit in subsection (1) is referred to in table O1: imputation credits, row 3 (deposit in tax pooling account):
            1. the imputation credit in subsection (2) is referred to in table O1: imputation credits, row 24 (elimination of double debit):
              1. the imputation debit in subsection (2)(a) is referred to in table O2: imputation debits, row 6 (refund from tax pooling account):
                1. the imputation debit in subsection (2)(ab) is referred to in table O2: imputation debits, row 7 (transfer of entitlement to another person in tax pooling account).

                  1. The credit date is the day—

                  2. the deposit is refunded; or
                    1. the entitlement is transferred; or
                      1. the credit arises in the company’s tax account with the Commissioner.

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                        Notes
                        • Section OB 26(2): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 196(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OB 26(2)(ab): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 196(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OB 26(3)(e): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 196(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OB 26(4)(ab): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 196(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).