INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 15 - Transitional provisions for conversion to 30% rate on 1 July 2001  

SECTION 160AUC   SPECIAL TREATMENT OF SOME FRANKING CREDITS AND DEBITS ARISING ON OR AFTER 1 JULY 2001  

160AUC(1)   [Adjustments to company's franking accounts]  

If:

(a) any of the events specified in the event column of the following table occurs in relation to a company on or after 1 July 2001; and

(b) the event:

(i) is not a franking credit or debit arising under this Division; and

(ii) is not a franking credit arising under section 160APL (carry forward of surplus from previous franking year) or 160ASEE (carry forward of venture capital sub-account surplus from previous franking year); and

(iii) is not a franking debit arising under section 160APX (under-franking of a dividend), 160AQB (payment of a franked dividend), 160AQCB , 160AQCBA , 160AQCNA or 160AQCNB (dividend streaming or franking credit trading arrangements), 160AQCC (on-market share buy back arrangements) or 160AQCNC (private company distributions treated as dividends);

the adjustments specified in the adjustments column for that item are made to the company's franking accounts:

Certain credits and debits arising on or after 1 July 2001
Item	Event	Adjustments
1	a class A franking credit of the company arises under this Part	(a)	a class A franking debit arises equal to the amount of the class A franking credit; and
		(b)	a class C franking credit also arises equal to the amount worked out using the formula:
		Amount of the class A franking credit	×	39 61	×	70 30
2	a class A franking debit of the company arises under this Part	(a)	a class A franking credit arises equal to the amount of the class A franking debit; and
		(b)	a class C franking debit also arises equal to the amount worked out using the formula:
		Amount of the class A franking debit	×	39 61	×	70 30
3	a class B franking credit of a company arises under this Part	(a)	a class B franking debit arises at that time equal to the amount of the class B franking credit; and
		(b)	a class C franking credit also arises at that time equal to the amount worked out using the formula:
		Amount of the class B franking credit	×	33 67	×	70 30
4	a class B franking debit of a company arises under this Part	(a)	a class B franking credit arises at that time equal to the amount of the class B franking debit; and
		(b)	a class C franking debit also arises at that time equal to the amount worked out using the formula:
		Amount of the class B franking debit	×	33 67	×	70 30
5	a class C franking credit of a company arises under this Part and the amount of the credit reflects an applicable general company tax rate of 34%	(a)	a class C franking debit arises at that time equal to the amount of the class C franking credit; and
		(b)	a class C franking credit also arises at that time equal to the amount worked out using the formula:
		Amount of the class C franking credit	×	34 66	×	70 30
6	a class C franking debit of a company arises under this Part and the amount of the debit reflects an applicable general company tax rate of 34%	(a)	a class C franking credit arises at that time equal to the amount of the class C franking debit; and
		(b)	a class C franking debit also arises at that time equal to the amount worked out using the formula:
		Amount of the class C franking debit	×	34 66	×	70 30
7	a venture capital credit of the PDF arises under this Part and the amount of the credit reflects an applicable general company tax rate of 34%	(a)	a venture capital debit of the PDF arises at that time equal to the amount of the venture capital credit; and
		(b)	a venture capital credit of the PDF also arises at that time equal to the amount worked out using the formula:
		Amount of the venture capital credit	×	34 66	×	70 30
8	a venture capital debit of a PDF arises under this Part and the amount of the debit reflects an applicable general company tax rate of 34%	(a)	a venture capital credit of the PDF arises at that time equal to the amount of the venture capital debit; and
		(b)	a venture capital debit also arises at that time equal to the amount worked out using the formula:
		Amount of the venture capital debit	×	34 66	×	70 30
9	a class C franking credit of a company arises under this Part and the amount of the credit reflects an applicable general company tax rate of 36%	(a)	a class C franking debit arises at that time equal to the amount of the class C franking credit; and
		(b)	a class C franking credit also arises at that time equal to the amount worked out using the formula:
		Amount of the class C franking credit	×	36 64	×	70 30
10	a class C franking debit of a company arises under this Part and the amount of the debit reflects an applicable general company tax rate of 36%	(a)	a class C franking credit arises at that time equal to the amount of the class C franking debit; and
		(b)	a class C franking debit also arises at that time equal to the amount worked out using the formula:
		Amount of the class C franking debit	×	36 64	×	70 30
11	a venture capital credit of the PDF arises under this Part and the amount of the credit reflects an applicable general company tax rate of 36%	(a)	a venture capital debit of the PDF arises at that time equal to the amount of the venture capital credit; and
		(b)	a venture capital credit of the PDF also arises at that time equal to the amount worked out using the formula:
		Amount of the venture capital credit	×	36 64	×	70 30
12	a venture capital debit of a PDF arises under this Part and the amount of the debit reflects an applicable general company tax rate of 36%	(a)	a venture capital credit of the PDF arises at that time equal to the amount of the venture capital debit; and
		(b)	a venture capital debit also arises at that time equal to the amount worked out using the formula:
		Amount of the venture capital debit	×	36 64	×	70 30

160AUC(2)   [When amount of credit or debit reflects company tax rate of 34%]  

For the purposes of items 5, 6, 7 and 8 of the table in subsection (1), the amount of a credit or debit reflects an applicable general company tax rate of 34% if:

(a) the applicable general company tax rate used to calculate the amount of the debit or credit is 34%; or

(b) the debit arises under subsection 160AQC(3) or section 160ASEI and the amount specified in the application for the estimated debit concerned is based on a 34% general company tax rate; or

(c) the credit or debit is equal to the amount of an earlier debit or credit and the earlier debit or credit reflected an applicable general company tax rate of 34%.

Note 1:

Paragraph (a) - the applicable general company tax rate will always be involved in the calculation of a credit or debit if an ``adjusted amount'' is used in the calculation.

Note 2:

Paragraph (c) covers provisions such as sections 160APV , 160APVB , 160AQCA and 160AQCCB .

160AUC(3)   [When amount of credit or debit reflects company tax rate of 36%]  

For the purposes of items 9, 10, 11 and 12 of the table in subsection (1), the amount of a credit or debit reflects an applicable general company tax rate of 36% if:

(a) the applicable general company tax rate used to calculate the amount of the debit or credit is 36%; or

(b) the credit or debit is equal to the amount of an earlier debit or credit and the earlier debit or credit reflected an applicable general company tax rate of 36%.

Note 1:

Paragraph (a) - the applicable general company tax rate will always be involved in the calculation of a credit or debit if an ``adjusted amount'' is used in the calculation.

Note 2:

Paragraph (b) covers provisions such as sections 160APV , 160APVB , 160AQCA and 160AQCCB .