Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 210 - Venture capital franking  

Subdivision 210-F - Rules affecting the allocation of venture capital credits  

Operative provisions

SECTION 210-80   Draining the venture capital surplus when a distribution frankable with venture capital credits is made  

210-80(1)    
If a *participating PDF would otherwise have a *venture capital surplus at the time a *distribution that is *frankable with a venture capital credit is made, the PDF must either:

(a) allocate a *venture capital credit to the distribution that is equal to the *franking credit on the distribution; or

(b) allocate a venture capital credit to the distribution that either alone or when added to venture capital credits allocated to other distributions made under the resolution of the PDF under which the distribution in question is made, reduces the surplus to nil, or creates a *venture capital deficit.

210-80(2)    
A *venture capital debit arises for a *participating PDF when a *distribution is made if the PDF does not allocate a *venture capital credit in accordance with subsection (1). The amount of the debit is:

Subsection (1) franked amount   −   Actual franked amount

where:

actual franked amount
is the amount of the *venture capital credit that is allocated to the *distribution by the PDF (this may be nil).

subsection (1) franked amount
is the amount of the *venture capital credit that would have been allocated to the *distribution if the PDF had made the smallest allocation needed to satisfy subsection (1).