CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-6
-
THE IMPUTATION SYSTEM
History
Pt 3-6 inserted by No 48 of 2002.
Division 207
-
Effect of receiving a franked distribution
History
Div 207 inserted by No 48 of 2002.
Subdivision 207-A
-
Effect of receiving a franked distribution generally
History
Subdiv 207-A inserted by No 48 of 2002.
Operative provisions
SECTION 207-15
Applying the general rule
207-15(1)
This Subdivision sets out, as a general rule, the tax effect of receiving a *franked distribution.
207-15(2)
This Subdivision does not apply to:
(a)
a partnership or trustee to whom a *franked distribution is made (except a partnership or trustee that is a *corporate tax entity, or a trustee of a trust that is a *complying superannuation entity, when the distribution is made); or
(b)
an entity to whom a franked distribution *flows indirectly.
Note:
Subject to the other provisions in this Division, Subdivision
207-B
applies to an entity excluded from the application of this Subdivision because of this subsection.
History
S 207-15(2) amended by No 70 of 2015, s 3 and Sch 1 item 80, by omitting
"
or *FHSA trust
"
after
"
a *complying superannuation entity
"
from para (a), effective 1 July 2015.
S 207-15(2) amended by No 45 of 2008, s 3 and Sch 1 item 19, by inserting
"
or *FHSA trust
"
after
"
a *complying superannuation entity
"
in para (a), effective 26 June 2008.
S 207-15(2) substituted by No 83 of 2004, s 3 and Sch 10 item 6, applicable to events that occur on or after 1 July 2002, subject to the rules on the application of Part 3-6 of the
Income Tax Assessment Act 1997
set out in the
Income Tax (Transitional Provisions) Act 1997
. S 207-15(2) formerly read:
207-15(2)
Where a distribution *flows indirectly to an entity, this Subdivision does not apply either to the entity to which it flows indirectly or to the entity to whom it is made. Subdivision 207-B applies in those cases.
Note: Subdivision
207-B
deals with distributions to an entity through certain interposed partnerships or trusts. A franked distribution will not flow indirectly through some partnerships or trusts, for example, an eligible entity within the meaning of Part IX of the
Income Tax Assessment Act 1936
, or an exempt institution that is eligible for a refund.
207-15(3)
This Subdivision applies subject to Subdivisions
207-C
,
207-D
,
207-E
and
207-F
.
Note 1:
Subdivision
207-C
sets out the residency requirements that must be satisfied by an individual or a corporate tax entity that receives a franked distribution.
Note 2:
Subdivision
207-D
sets out the cases in which the gross-up and tax offset rules in this Subdivision and Subdivision 207-B will not apply because the franked distribution (or a share of it) would not have been taxed in any case.
Note 3:
Subdivision
207-E
sets out the exceptions to the rules in Subdivision 207-D.
Note 4:
Subdivision
207-F
sets out the cases in which the gross-up and tax offset rules in this Subdivision and Subdivision 207-B will not apply because the imputation system has been manipulated in a way that is not permitted under the income tax law.
History
S 207-15(3) substituted by No 83 of 2004, s 3 and Sch 10 item 6, applicable to events that occur on or after 1 July 2002, subject to the rules on the application of Part 3-6 of the
Income Tax Assessment Act 1997
set out in the
Income Tax (Transitional Provisions) Act 1997
. S 207-15(3) formerly read:
207-15(3)
This Subdivision applies subject to:
(a)
Subdivision 207-C; and
(b)
Subdivision 207-E; and
(c)
Subdivision 207-F.
Note 1: Subdivision 207-C sets out the residency requirements which must be satisfied by an individual or a corporate tax entity that receives a franked distribution.
Note 2: Subdivision 207-E sets out cases in which the general rule will not apply because the distribution is exempt income or non-assessable non-exempt income and so would not be taxed in any case. It also replaces the general rule for exempt institutions that are eligible for a refund and, in some cases, for eligible entities within the meaning of Part IX of the
Income Tax Assessment Act 1936
and for life insurance companies.
Note 3: Subdivision 207-F sets out cases in which the general rule will not apply because the imputation system has been manipulated in a way that is not permitted under income tax law, for example by streaming distributions or dividend stripping.
S 207-15(3) amended by No 66 of 2003.
S 207-15 inserted by No 48 of 2002.
History
S 207-15(3) substituted by No 83 of 2004 and amended by No 66 of 2003.
S 207-15 inserted by No 48 of 2002.