Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 205 - Franking accounts, franking deficit tax liabilities and the related tax offset  

Operative provisions  

SECTION 205-45   Franking deficit tax  

Object

205-45(1)    
While recognising that an entity may anticipate *franking credits when *franking *distributions, the object of this section is to prevent those credits from being anticipated indefinitely by requiring the entity to reconcile its *franking account at certain times and levying tax if the account is in *deficit.

Franking deficit at end of income year

205-45(2)    
An entity is liable to pay franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if its *franking account is in *deficit at the end of an income year.

Corporate tax entity ceases to be a franking entity

205-45(3)    
An entity is liable to pay *franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if:

(a) it ceases to be a *franking entity; and

(b) immediately before it ceases to be a franking entity, its *franking account is in *deficit.

Note:

The tax is imposed in the New Business Tax System (Franking Deficit Tax) Act 2002 and the amount of the tax is set out in that Act.