OB 42ICA on-market cancellation

1. When an ICA company acquires its shares in an on-market cancellation, it has an imputation debit for an amount calculated using the formula—

   $ASC\; per\; share\; excess\; \times \; tax\; rate\; ÷\; (1\; -\; tax\; rate).$

   Where:

2. In the formula,—

3. ASC per share excess is the amount distributed on the on-market cancellation that is more than the amount of the available subscribed capital per share calculated under the ordering rule:
4. tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the tax year in which the acquisition occurs.

5. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 15 (on-market cancellation).

6. If the formula produces a negative result, the debit is treated as zero.

7. The debit date is the day the shares are acquired by the company in the on-market cancellation.

Compare

• 2004 No 35 s ME 5(1)(c), (2)(c)

Notes

• Section OB 42(1) formula: amended, on 1 April 2008, by section 498(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
• Section OB 42(2)(b): substituted, on 1 April 2008, by section 498(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).