INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 12A - Venture capital franking  

Subdivision G - Venture capital franking rebates for certain taxpayers  

SECTION 160ASEP   VENTURE CAPITAL FRANKING REBATE  

160ASEP(1)   General rule for rebate.  

Subject to subsections (2) and (3), if:

(a) a PDF pays a dividend to a shareholder in a year of income; and

(b) the dividend is a venture capital franked dividend to a particular extent; and

(c) the dividend is not exempt income of the shareholder (disregarding section 124ZM ); and

(d) the dividend is not paid as part of a dividend stripping operation; and

(e) the shareholder is a resident at the time the dividend is paid; and

(f) the shareholder qualifies for franking rebates under this Subdivision in relation to the dividends paid by the PDF in that year of income; and

(g) the shareholder is not:

(i) a partnership; or

(ii) a trustee (other than the trustee of an eligible entity within the meaning of Part IX); and

(h) the shareholder is a qualified person in relation to the dividend for the purposes of Division 1A; and

(i) if the shareholder is a life assurance company - at any time during the period that:

(i) starts at the beginning of the year of income of the life assurance company in which the dividend was paid; and

(ii) ends at the time when the dividend was paid;

the assets of the life assurance company from which the dividend was derived were both:

(iii) included in the insurance funds of the life assurance company; and

(iv) not held on behalf of the life assurance company's shareholders;

the shareholder is entitled to a rebate of tax in the shareholder's assessment in respect of income of the year of income equal to the amount worked out using the following formula:

Venture capital franked amount of the dividend

×

Company tax rate         1 − Company tax rate

where:

company tax rate
means the applicable general company tax rate.

160ASEP(2)   Amount of the rebate for life assurance companies.  

If the shareholder is a life assurance company, the rebate the shareholder is entitled to is worked out using the formula:

Subsection (1) rebate   ×

CS/RA income     Total income

where:

CS/RA income
is the amount of the shareholder's assessable income for the year of income that is allocated to the CS/RA class of business under subsection 116CE(4) .

subsection (1) rebate
is the rebate that the shareholder would otherwise be entitled to under subsection (1).

total income
is the shareholder's assessable income for the year of income.

160ASEP(3)   Rebate for registered organisations.  

If the shareholder is a registered organisation within the meaning of section 116E , the shareholder is entitled to the rebate under subsection (1) in relation to a dividend only if the dividend is income derived from the shareholder's CS/RA business.