INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 7B - Tainted share capital accounts  

Subdivision C - Life assurance companies  

SECTION 160ARDV   CONSEQUENCES OF TAINTING SHARE CAPITAL ACCOUNT - AUTOMATIC FRANKING DEBIT  

160ARDV(1)   [Class A and Class C debits arise]  

If a company transfers an amount to its share capital account from any of its other accounts, a class A franking debit and a class C franking debit of the company arise on the day of the transfer.

160ARDV(2)   [Amount of debit calculations]  

The amount of:

(a) the class A franking debit is equal to the amount (if any) that would be calculated under subsection 160AQDB(1) as the class A required franking amount for a frankable dividend if the assumptions in subsection (3) were made; and

(b) the class C franking debit is equal to the amount (if any) that would be calculated under subsection 160AQDB(4) as the class C required franking amount for a frankable dividend if the assumptions in subsection (3) were made.

160ARDV(3)   [Assumptions re: dividend]  

The assumptions for paragraphs (2)(a) and (b) are that:

(a) the dividend was paid on the day of the transfer to a shareholder in the company; and

(b) the amount of the dividend were equal to the amount transferred to the share capital account.