INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 2A - Exempting companies and former exempting companies  

SECTION 160AQCNJ   EXEMPTING DEBITS MAY ARISE WHEN CERTAIN FORMER EXEMPTING COMPANIES PAY FRANKABLE DIVIDENDS  

160AQCNJ(1)   [Class A required franking amount]  

If a former exempting company pays a frankable dividend in respect of which there is a class A required franking amount and:

(a) the reckoning day of the dividend is before the day on which the company became a former exempting company; or

(b) subsection 160AQE(3) or (4) applies in relation to the dividend;

then, subject to subsection (3), there arises a class A exempting debit of the company equal to the amount (if any) by which the class A required franking amount of the dividend exceeds the actual franked amount of the dividend.

160AQCNJ(2)   [Class C required franking amount]  

If a former exempting company pays a frankable dividend in respect of which there is a class C required franking amount and:

(a) the reckoning day of the dividend is before the day on which the company became a former exempting company; or

(b) subsection 160AQE(3) or (4) applies in relation to the dividend;

then, subject to subsection (3), there arises a class C exempting debit of the company equal to the amount (if any) by which the class C required franking amount of the dividend exceeds the actual franked amount of the dividend.

160AQCNJ(3)   [Debit amount reduced]  

If:

(a) a class A exempting debit, or a class C exempting debit, of a company arises under subsection (1) or (2) in respect of a dividend paid by the company; and

(b) a class A exempting debit, or a class C exempting debit, of the company arises under subsection 160AQCNE(1) or (2) in respect of the dividend;

the amount of the debit that, apart from this subsection, would arise under subsection (1) or (2) is reduced by the amount of the debit that arises under subsection 160AQCNE(1) or (2) .

160AQCNJ(4)   [Dividend taken to be franked]  

When a class A exempting debit of a company arises, or, apart from subsection (3), would arise, under subsection (1), or a class C exempting debit of a company arises, or, apart from subsection (3), would arise, under subsection (2), in respect of the payment of a dividend, the dividend is taken for the purposes of section 160APX to have been class A franked or class C franked, as the case may be, to the extent of the amount worked out by using the formula:

Dividend   ×   Notional percentage

160AQCNJ(5)   [Formula]  

For the purposes of subsection (4), the notional percentage is the percentage worked out by using the formula:

Franking debit + Exempting debit     Dividend

×   100

160AQCNJ(6)   [Interpretation]  

In the formulas in subsections (4) and (5):

dividend
means the amount of the dividend.

exempting debit
means the amount of the class A exempting debit or class C exempting debit that, apart from subsection (3), would arise in respect of the dividend under subsection (1) or (2).

franking debit
means the amount (if any) of the class A franking debit or class C franking debit arising in respect of the dividend under section 160AQB .