INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 2A - Exempting companies and former exempting companies  

SECTION 160AQCNP   TREASURER MAY CONVERT EXEMPTING SURPLUS TO FRANKING CREDIT OF FORMER EXEMPTING COMPANY PREVIOUSLY OWNED BY THE COMMONWEALTH  

160AQCNP(1)   Application.  

This section applies if:

(a) at a particular time, whether before or after the commencement of this section, a company was or is an exempting company; and

(b) at that time all the shares in the company were or are owned by the Commonwealth; and

(c) the Commonwealth has offered for sale or sold, or proposes to offer for sale, some or all of the shares; and

(d) the Treasurer is satisfied, having regard to the matters mentioned in subsection (2), that it is desirable to make a declaration or declarations under this section in relation to the company.

160AQCNP(2)   Matters to be taken into account.  

The matters to which the Treasurer is to have regard under paragraph (1)(d) are:

(a) whether the making of the declaration or declarations is necessary to enable the company to pay fully franked dividends after the sale; and

(b) the extent to which the success of the sale or proposed sale depended or will depend upon the ability of the company to pay franked dividends; and

(c) the extent to which the reduction in receipts of income tax resulting from the making of the declaration or declarations would be offset by the receipt of increased proceeds from the sale; and

(d) any other matters that the Treasurer thinks relevant.

160AQCNP(3)   When declarations may be made.  

The following provisions of this section apply after the company became or becomes a former exempting company.

160AQCNP(4)   Conversion of class A exempting surplus.  

If the former exempting company would, apart from this section, have a class A exempting surplus at the end of a franking year, the Treasurer may, in writing, declare that:

(a) a class A exempting debit of the company (not exceeding the class A exempting surplus) specified in the declaration is taken to have arisen immediately before the end of that franking year; and

(b) a class A franking credit of the company equal to the amount of the debit is taken to have arisen immediately before the end of that franking year.

160AQCNP(5)   Conversion of class C exempting surplus.  

If the former exempting company would, apart from this section, have a class C exempting surplus at the end of a franking year, the Treasurer may, in writing, declare that:

(a) a class C exempting debit of the company (not exceeding the class C exempting surplus) specified in the declaration is taken to have arisen immediately before the end of that franking year; and

(b) a class C franking credit of the company equal to the amount of the debit is taken to have arisen immediately before the end of that franking year.

160AQCNP(6)   Declarations may be conditional.  

A declaration may be expressed to be subject to compliance by the former exempting company with such conditions as are specified in the declaration.

160AQCNP(7)   Effect of breach of condition.  

If a condition specified in a declaration is not complied with, the Treasurer may revoke the declaration and, if he or she thinks appropriate, make a further declaration under subsection (4) or (5), as the case requires.

160AQCNP(8)   Effect of declaration.  

A declaration, unless it is revoked, has effect according to its terms.