This section deals with the case where the profits of a company are stripped by way of a distribution which is, or arises out of an issue of bonus shares or the repayment of security which is to be treated as distribution by virtue of sections 84, 85 or 86. It applies to any recipients of such a distribution and provides that, except in so far as the recipient receives a normal return on his investment, no account is to be taken of such a bonus issue or relevant tax credit for the purpose of any exemptions, reliefs or set-offs. We are providing that there is no tax credit where there is stripping.
SECTION 89.
Question proposed: "That section 89 stand part of the Bill."
Does this affect shares where there might be a share distribution in view of income, where the option is given sometimes to the shareholder?
That does not arise here.
I do not think it is operated so much by companies resident in this country.
Question put and agreed to.