Taxation Laws Amendment Act (No. 3) 1998 (47 of 1998)

Schedule 8   Distributions from private companies

Part 1   Income Tax Assessment Act 1936

5   After section 160AQCNB

Insert:

160AQCNC Franking debits for private company distributions treated as dividends

Creation of class A franking debit

(1) If a private company is a life assurance company and is taken under Division 7A of Part III to have paid a dividend at the end of the company's year of income, there arises on the last day of the year of income a class A franking debit of the company equal to the amount (if any) worked out under subsection (2).

Note: Division 7A of Part III treats a private company as having paid a dividend if it pays or lends an amount to a shareholder or shareholder's associate, or forgives the debt of a shareholder or shareholder's associate.

Amount of class A franking debit

(2) The amount is the class A required franking amount worked out under subsection 160AQDB(1) for a dividend equal to the amount taken to have been paid as a dividend. (For this purpose, assume the dividend was paid on the last day of the company's year of income.)

Creation of class C franking debit

(3) If a private company is taken under Division 7A of Part III to have paid a dividend at the end of the company's year of income, there arises on the last day of the year of income a class C franking debit of the company equal to the amount (if any) worked out under subsection (4).

Amount of class C franking debit

(4) The amount is the class C required franking amount worked out under subsection 160AQDB(4) for a dividend equal to the amount taken to have been paid as a dividend. (For this purpose, assume the dividend was paid on the last day of the company's year of income.)