Income tax: capital gains: how does Part IIIA of the Income Tax Assessment Act 1936 operate where all or part of a liquidator's final distribution is deemed to be a subsection 47(1) dividend and assessed as income under subsection 44(1)?

The full amount of the final distribution is consideration in respect of the disposal of the shares for the purposes of section 160ZD. Subsection 160ZD(4) does not apply in this case to restrict the consideration in respect of the disposal of the shares to that portion of the distribution not assessed as a dividend.

For the purposes of subsection 160ZA(4), any part of a final distribution that is deemed to be a dividend under subsection 47(1) and assessable income under subsection 44(1) is treated, except to the extent that it is a section 160ZLA rebatable dividend adjustment, as having been included in the taxpayer's assessable income as a result of the disposal of the shares. The final distribution, the disposal of the shares and the operation of subsection 47(1) are sufficiently connected for subsection 160ZA(4) to ensure the same amount is not taxed as a dividend and as a capital gain.