This section applies if section 684 (person liable to counteraction of income tax advantage) applies to a person because the person is in a position to obtain or has obtained an income tax advantage by falling within the circumstances mentioned in section 690 (receipt of relevant company assets (circumstance E)) when share capital is repaid.

An assessment to income tax made in accordance with a counteraction notice must be an assessment for the tax year in which the repayment occurs.

The references in this section to the repayment of share capital include references to any distribution made in respect of any shares in a winding up or dissolution of the company.

In subsection (3) “shares” includes stock and any other interest of a member in a company.