INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 5 - Franking of dividends  

Subdivision C - Franking deficit tax and deficit deferral tax to offset company tax  

SECTION 160AQKAA   ENTITLEMENT FOR LIFE ASSURANCE COMPANIES TO OFFSET ON OR AFTER 4 MAY 1999  

160AQKAA(1)   Determination by Commissioner - original assessment.  

Subject to this Subdivision, where:

(a) a life assurance company has become liable to pay one or more of the following in relation to a franking year that ends on or after 4 May 1999:

(i) class A franking deficit tax for the franking year;

(ii) class C franking deficit tax for the franking year;

(iii) class A deficit deferral tax in relation to the refund of one or more instalments paid during the franking year;

(iv) class C deficit deferral tax in relation to the refund of one or more instalments paid during the franking year; and

(b) after the end of the franking year, the Commissioner serves on the company a notice of an original company tax assessment for an eligible year of income in which the company was sufficiently resident;

the Commissioner must determine that the company is entitled to an offset in relation to that company tax equal to the amount specified in the determination.

160AQKAA(2)   Determination to specify lesser of 2 amounts.  

The amount specified in the determination must be the lesser of the following amounts:

(a) the sum of the class A franking deficit tax, the class A deficit deferral tax, the class C franking deficit tax and the class C deficit deferral tax, reduced by any part of it that has been previously applied under this Subdivision;

(b) the amount, worked out under section 160AQKAB , of the company's liability to pay company tax for the eligible year of income that would normally give rise to franking credits, reduced by any foreign tax credits allowable in respect of tax paid or payable by the company in respect of income derived in the eligible year of income.

160AQKAA(3)   Determination by Commissioner - amended assessment.  

Subject to this Subdivision, where:

(a) a life assurance company has become liable to pay one or more of the following in relation to a franking year that ends on or after 4 May 1999:

(i) class A franking deficit tax for the franking year;

(ii) class C franking deficit tax for the franking year;

(iii) class A deficit deferral tax in relation to the refund of one or more instalments paid during the franking year;

(iv) class C deficit deferral tax in relation to the refund of one or more instalments paid during the franking year; and

(b) after the end of the franking year, the Commissioner serves on the company a notice of an amended company tax assessment for an eligible year of income in which the company was sufficiently resident;

then:

(c) any determination already made by the Commissioner under this section as a result of the service on the company of an original or amended company tax assessment for the eligible year of income is revoked; and

(d) except for the purposes of section 160AQKAD , the company is not entitled, and is taken never to have been entitled, to an offset under any such determination; and

(e) the Commissioner must make a new determination that the company is entitled to an offset in relation to its company tax for the eligible year of income equal to the amount specified in the new determination.

160AQKAA(4)   Determination to specify lesser of 2 amounts.  

The amount specified in the new determination must be the lesser of the following amounts:

(a) the sum of the class A franking deficit tax, the class A deficit deferral tax, the class C franking deficit tax and the class C deficit deferral tax, reduced by any part of it that has been previously applied under this Subdivision in relation to an eligible year of income other than the eligible year of income for which the amended assessment is made;

(b) the amount, worked out under section 160AQKAB , of the company's liability to pay company tax for the eligible year of income that would normally give rise to franking credits, reduced by any foreign tax credits allowable in respect of tax paid or payable by the company in respect of income derived in the eligible year of income.

160AQKAA(5)   Company may claim offset.  

The company may, for the purposes of making a claim for an offset under this section in relation to a year of income, determine:

(a) whether an offset is allowable to the company; and

(b) if the company determines that an offset is so allowable - the amount of the offset.

160AQKAA(6)   [Timing of offset claim]  

A claim under subsection (5) must be made after the end of a franking year that ends on or after 4 May 1999 in the return furnished by the company in respect of income of that year of income or after the furnishing of that return.