This section deals with the converse of the situation that we dealt with in section 85, that is where there is first a bonus issue and later a repayment of share capital. It achieves in relation to the repayment or redemption of a bonus issue of share capital what is achieved by section 84 in relation to the redemption of a bonus security. Again, I received no representations in this.
SECTION 86.
Question proposed: "That section 86 stand part of the Bill."
They probably do not know. Apart from receiving representations, is the Minister certain that in all of this he is not trying to cause complications for genuine bona fide legitimate company transactions, reorganisations and so on?
We were anxious to ensure that we would not upset such desirable reorganisations and we have special provisions which ensure that such are not involved in an unfavourable tax situation. We are conscious of this at all times, as well as in relation to this particular section.
This refers to all companies?
Yes. The Committee will recall that section 20 has special provisions dealing with reconstruction without change of ownership. I circulated examples of the operation of section 86.
Question put and agreed to.
SECTION 87.
Question proposed: "That section 87 stand part of the Bill."
Section 87 provides further definitions in the field of distributions and also prevents avoidance of tax by means of collusive arrangements under which companies may make distributions to each others' members.
It seems reasonable.
Question put and agreed to.