INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 7 - Dividends paid to trusts and partnerships  

Subdivision B - Rebates for beneficiaries, trustees and partners  

SECTION 160AQYA   FRANKING REBATE FOR TRUSTEES OF SUPERANNUATION FUNDS, ADFs AND PSTs  

160AQYA(1)   [Rebate in respect of trust amount]  

Where:

(a) a trust amount is included in the assessable income of a taxpayer of a year of income;

(b) the taxpayer is the trustee of an eligible entity within the meaning of Part IX; and

(c) there are one or more of the following:

(i) a class A flow-on franking amount in relation to the trust amount;

(ii) a class B flow-on franking amount in relation to the trust amount;

(iii) a class C flow-on franking amount in relation to the trust amount; and

(ca) the taxpayer is a qualified person in relation to the relevant franked dividend for the purposes of Division 1A;

the taxpayer is entitled to a rebate of tax in the taxpayer's assessment in respect of income of the year of income of an amount equal to whichever of the following is applicable:

(d) if only subparagraph (c)(i) applies - the class A potential rebate amount in relation to the trust amount;

(e) if only subparagraph (c)(ii) applies - the class B potential rebate amount in relation to the trust amount;

(ea) if only subparagraph (c)(iii) applies - the class C potential rebate amount in relation to the trust amount;

(f) if subparagraphs (c)(i) and (ii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class B potential rebate amount in relation to the trust amount;

(g) if subparagraphs (c)(i) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class C potential rebate amount in relation to the trust amount;

(h) if subparagraphs (c)(ii) and (iii) apply - the sum of:

(i) the class B potential rebate amount in relation to the trust amount; and

(ii) the class C potential rebate amount in relation to the trust amount;

(i) if subparagraphs (c)(i), (ii) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class B potential rebate amount in relation to the trust amount; and

(iii) the class C potential rebate amount in relation to the trust amount.

160AQYA(1A)   [Payment equivalent to interest]  

A taxpayer is not entitled to a rebate of tax under subsection (1) if:

(a) the trust amount was paid:

(i) in respect of an interest in the trust or partnership that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

160AQYA(1B)   [Interpretation]  

In subsection (1A):

commencing time
means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid
: a trust amount is taken to have been paid to a taxpayer if it is included in the taxpayer's assessable income.

160AQYA(1C)   [``Reasonably'' regarded as equivalent]  

In determining whether the payment of the trust amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.

160AQYA(2)   [Rebate in respect of partnership amount]  

Where:

(a) a partnership amount is included in, or allowable as a deduction from, the assessable income of a taxpayer of a year of income;

(b) the taxpayer is a trustee of an eligible entity within the meaning of Part IX; and

(c) there are one or more of the following:

(i) a class A flow-on franking amount in relation to the partnership amount;

(ii) a class B flow-on franking amount in relation to the partnership amount;

(iii) a class C flow-on franking amount in relation to the partnership amount;

(ca) the taxpayer is a qualified person in relation to the relevant franked dividend for the purposes of Division 1A;

the taxpayer is entitled to a rebate of tax in the taxpayer's assessment in respect of income of the year of income of an amount equal to whichever of the following is applicable:

(d) if only subparagraph (c)(i) applies - the class A potential rebate amount in relation to the partnership amount;

(e) if only subparagraph (c)(ii) applies - the class B potential rebate amount in relation to the partnership amount;

(ea) if only subparagraph (c)(iii) applies - the class C potential rebate amount in relation to the partnership amount;

(f) if subparagraphs (c)(i) and (ii) apply - the sum of:

(i) the class A potential rebate amount in relation to the partnership amount; and

(ii) the class B potential rebate amount in relation to the partnership amount;

(g) if subparagraphs (c)(i) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the partnership amount; and

(ii) the class C potential rebate amount in relation to the partnership amount;

(h) if subparagraphs (c)(ii) and (iii) apply - the sum of:

(i) the class B potential rebate amount in relation to the partnership amount; and

(ii) the class C potential rebate amount in relation to the partnership amount;

(i) if subparagraphs (c)(i), (ii) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the partnership amount; and

(ii) the class B potential rebate amount in relation to the partnership amount; and

(iii) the class C potential rebate amount in relation to the partnership amount.

160AQYA(3)   [No rebate]  

If a determination is made under paragraph 177EA(5)(b) in respect of the whole of a dividend or distribution that is represented by the trust amount or partnership amount, the taxpayer is not entitled to a rebate of tax under this section.

160AQYA(4)   [Reduction of rebate]  

If a determination is made under paragraph 177EA(5)(b) in respect of a part of a dividend or distribution that is represented by the trust amount or partnership amount, the rebate of tax to which the taxpayer would otherwise be entitled under this section is reduced by the same proportion as that part of the dividend or distribution bears to the whole of the dividend or distribution.

160AQYA(5)   [Payment equivalent of interest]  

A taxpayer is not entitled to a rebate of tax under subsection (1) if:

(a) the partnership amount was paid:

(i) in respect of an interest in the trust or partnership that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

160AQYA(6)   [Interpretation]  

In subsection (5):

commencing time
means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid
: a partnership amount is taken to have been paid to a taxpayer if it is included in, or is allowed as a deduction from, the taxpayer's assessable income.

160AQYA(7)   [Whether ``reasonably'' equivalent]  

In determining whether the payment of the partnership amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.