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 160AQZA   FRANKING REBATE FOR CERTAIN LIFE ASSURANCE COMPANIES  

160AQZA(1)   [Class A potential rebate amount]  

If:

(a) a class A franking credit of a taxpayer arises or, but for section 160APKA would arise, under subsection 160APQ(1) in respect of:

(i) a trust amount or partnership amount that is included in; or

(ii) a partnership amount that is allowed as a deduction from;

the assessable income of the taxpayer of a year of income; and

(b) subsection 160APQ(3) applies or, but for section 160APKA , it would apply;

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 the class A potential rebate amount in relation to the trust amount or partnership amount.

160AQZA(2)   [Class B potential rebate amount]  

If:

(a) a class B franking credit of a taxpayer arises or, but for section 160APKA would arise, under subsection 160APQ(1A) in respect of:

(i) a trust amount or partnership amount that is included in; or

(ii) a partnership amount that is allowed as a deduction from;

the assessable income of the taxpayer of a year of income; and

(b) subsection 160APQ(3) applies or, but for section 160APKA , it would apply;

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 the class B potential rebate amount in relation to the trust amount or partnership amount.

160AQZA(3)   [Class C potential rebate amount]  

If:

(a) a class C franking credit of a taxpayer arises or, but for section 160APKA would arise, under subsection 160APQ(2) in respect of:

(i) a trust amount or partnership amount that is included in; or

(ii) a partnership amount that is allowed as a deduction from;

the assessable income of the taxpayer of a year of income; and

(b) subsection 160APQ(3) applies or, but for section 160APKA , it would apply;

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 the class C potential rebate amount in relation to the trust amount or partnership amount.

160AQZA(4)   [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.

160AQZA(5)   [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.

160AQZA(6)   [Payment equivalent of interests]  

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

(a) the trust amount or 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.

160AQZA(7)   [Interpretation]  

In subsection (6):

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

paid
: a trust amount or 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.

160AQZA(8)   [Whether ``reasonably'' equivalent]  

In determining whether the payment of the trust amount or 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.