Taxation Laws Amendment Act (No. 4) 1995 (171 of 1995)

SCHEDULE 2   AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 RELATING TO DIVIDEND IMPUTATION

159.   Transitional

Liability to franking deficit tax

(1) A company is taken to be liable to pay tax under subsection 160AQJ(1) of the Income Tax Assessment Act 1936 in respect of its 1995-96 franking year if:

(a) at the company's class C conversion time the company is not a life assurance company; and

(b) at the company's class C conversion time the company has a class A franking deficit; and

(c) the company would, on the assumption that the amendments made by this Schedule did not apply in respect of the company for its 1995-96 franking year, have been liable to pay tax under subsection 160AQJ(1) of the Income Tax Assessment Act 1936.

(2) If a company is taken to be liable to pay tax as a result of the application of subsection (1), a class C franking credit of the company arises at the end of the company's 1995-96 franking year worked out using the formula:

Amount of the tax x 64/36

Liability to penalty for over-franking

(3) A company is taken to be liable to pay tax under subsection 160ARX(1) of the Income Tax Assessment Act 1936 in respect of its 1995-96 franking year if:

(a) at the company's class C conversion time the company is not a life assurance company; and

(b) at the company's class C conversion time the company has a class A franking deficit; and

(c) the company would, on the assumption that the amendments made by this Schedule did not apply in respect of the company for its 1995-96 franking year, have been liable to pay tax under subsection 160ARX(1) of the Income Tax Assessment Act 1936.