9Reduction of liability where tax paid

9 Reduction of liability where tax paid

(1) Where:

(a) in relation to a sale of shares, or of an interest in shares, under a scheme, recoupment tax is or was payable on a vendors taxable amount in relation to an amount of ordinary company tax or undistributed profits tax payable by a company in relation to a year of income; and

(b) after the recoupment tax became payable, an amount (in this subsection referred to as the company tax payment) that is paid to the Commissioner is applied, or is deemed to have been applied, in reduction of ordinary company tax or undistributed profits tax, as the case may be, payable by the company in relation to the year of income;

there shall be deemed to be applied, or to have been applied, in reduction of the recoupment tax that is or was payable on the vendors taxable amount:

(c) if the vendors taxable amount is a primary taxable amount—the amount ascertained by multiplying the amount of the company tax payment by the apportionment factor in relation to the primary taxable amount; and

(d) if the vendors taxable amount is a secondary taxable amount—the amount ascertained by multiplying the company tax payment by the reduction factor in relation to the secondary taxable amount.

(2) For the purposes of subsection (1), the reduction factor in relation to a secondary taxable amount is the product of the numbers that are the relevant numbers in relation to:

(a) the secondary taxable amount;

(b) the vendors taxable amount by reference to which, or to recoupment tax on which, the secondary taxable amount was ascertained; and

(c) any other vendors taxable amount by reference to which, or to recoupment tax on which, a vendors taxable amount to which paragraph (b) or this paragraph applies was ascertained.

(3) For the purposes of subsection (2), the relevant number in relation to a primary taxable amount or a secondary taxable amount is:

(a) in the case of a primary taxable amount—the apportionment factor in relation to the primary taxable amount; and

(b) in the case of a secondary taxable amount—the number that bears to 1 the same proportion as the secondary taxable amount bears to the vendors taxable amount, or to the recoupment tax on a vendors taxable amount, as the case may be, by reference to which the secondary taxable amount was ascertained.

(4) Where:

(a) recoupment tax is or was payable on a secondary taxable amount and recoupment tax is payable on the vendors taxable amount by reference to which, or to recoupment tax on which, the secondary taxable amount was ascertained; and

(b) an amount of recoupment tax on that vendors taxable amount is paid or an amount is deemed, by another application of this subsection, to have been applied in reduction of the recoupment tax payable on that vendors taxable amount;