Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-6
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THE IMPUTATION SYSTEM
Division 219
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Imputation for life insurance companies
Subdivision 219-B
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Franking accounts of life insurance companies
SECTION 219-15
Franking credits
219-15(1)
The table in section 205-15 does not apply to a *life insurance company.
219-15(2)
The following table sets out when a *franking credit arises under this section in the *franking account of a *life insurance company.
•
is reversed by a franking debit that arises under item 1 of the table in section
219-30
; and
•
is replaced with a franking credit that arises under item 2 of the table in this section.
219-15(3)
A *franking credit covered by item 6 of the table arises at the end of the income year: (a) that is an income year of the last partnership or trust interposed between:
219-15(4)
The proportion is the standard corporate tax rate (within the meaning of Part IVA of the Income Tax Assessment Act 1936 ) divided by 40%.
View history note
Hide history noteThe table in section 205-15 does not apply to a *life insurance company.
219-15(2)
The following table sets out when a *franking credit arises under this section in the *franking account of a *life insurance company.
| Franking credits in the franking account | |||
| Item | If: | A credit of: | Arises: |
| 1 | the company *pays a PAYG instalment; and
the company satisfies the *residency requirement for the income year in relation to which the PAYG instalment is paid; and the payment is made before the company ' s *assessment day for that income year; and the company is a *franking entity for the whole or part of the relevant *PAYG instalment period |
that part of the payment that:
(a) the company estimates will be attributable to the *shareholders ' share of the *income tax liability of the company for that income year; and (b) is attributable to the period during which the company was a franking entity |
on the day on which the payment is made (see note 1 to this subsection) |
| 2 | the company *paid a PAYG instalment; and
the company satisfied the *residency requirement for the income year in relation to which the PAYG instalment was paid; and the payment was made before the company ' s *assessment day for that income year; and the company was a *franking entity for the whole or part of the relevant *PAYG instalment period |
that part of the payment that is attributable to:
(a) the *shareholders ' share of the *income tax liability of the company for that income year; and (b) the period during which the company was a franking entity |
on the company ' s assessment day for that income year (see note 1 to this subsection) |
| 3 | the company *pays a PAYG instalment; and
the company satisfies the *residency requirement for the income year in relation to which the PAYG instalment is paid; and the payment is made on or after the company ' s *assessment day for that income year; and the company is a *franking entity for the whole or part of the relevant *PAYG instalment period |
that part of the payment that is attributable to:
(a) the *shareholders ' share of the *income tax liability of the company for that income year; and (b) the period during which the company was a franking entity |
on the day on which the payment is made |
| 4 | the company *pays income tax; and
the company satisfies the *residency requirement for the income year for which the tax is paid; and the company is a *franking entity for the whole or part of that income year |
that part of the payment that is attributable to:
(a) the *shareholders ' share of the *income tax liability of the company for that income year; and (b) the period during which the company was a franking entity |
on the day on which the payment is made |
| 5 | a *franked distribution is made to the company; and
the company satisfies the *residency requirement for the income year in which the distribution is made; and |
the amount of the tax offset | on the day on which the distribution is made |
| the company is a *franking entity when it receives the distribution; and | |||
| the company is entitled to a *tax offset under Division 207 because of the distribution; and | |||
| the tax offset is not subject to the refundable tax offset rules (see Division 67 ) | |||
| 6 | a *franked distribution *flows indirectly to the company through a partnership or the trustee of a trust; and | the amount of the tax offset | at the time specified in subsection (3) |
| the company is a *franking entity when the franked distribution is made; and | |||
| the company is entitled to a *tax offset under Division 207 because of the distribution; and | |||
| the tax offset is not subject to the refundable tax offset rules (see Division 67 ) | |||
| 6A | a *franking debit arises under item 2 or 3 of the table in subsection
219-30(2)
because the company receives a *tax offset refund; and
the company ' s tax offset refund is subsequently reduced and the company is liable to pay to the Commonwealth the amount of the excess mentioned in subsection 172A(2) of the Income Tax Assessment Act 1936 ; and the company pays the amount of the excess |
the difference (if any) between:
(a) the amount of the franking debit; and (b) the amount the franking debit would have been if the tax offset refund were reduced by the amount of the excess |
on the day on which the amount of the excess is paid |
| 7 | the company incurs a liability to pay *franking deficit tax under section 205-45 or 205-50 | the amount of the liability | immediately after the liability is incurred |
| 8 | a *franking credit arises under subsection 418-55(1) in relation to an *exploration credit | the amount of the *franking credit specified in subsection 418-55(2) | at the time provided by subsection 418-55(3) |
| 9 | the company *pays diverted profits tax; and
the company satisfies the *residency requirement for the income year for which the tax is paid; and the company is a *franking entity for the whole or part of that income year |
that part of the payment that is attributable to:
(a) the *shareholders ' share of the *income tax liability of the company for that income year; and (b) the period during which the company was a franking entity; multiplied by the proportion worked out under subsection (4) |
on the day on which the payment is made |
Note 1:
On the assessment day, a franking credit that arose under item 1 of the table:
Note 2:
Section 219-50 tells you how to work out the part of an amount that is attributable to the shareholders ' share of the income tax liability of the company for the income year.
Note 3:
To find out whether a tax offset under Division 207 is subject to the refundable tax offset rules: see section 67-25 .
219-15(3)
A *franking credit covered by item 6 of the table arises at the end of the income year: (a) that is an income year of the last partnership or trust interposed between:
(i) the *life insurance company; and
(b) during which the *franked distribution *flows indirectly to the life insurance company.
(ii) the *corporate tax entity that made the distribution; and
219-15(4)
The proportion is the standard corporate tax rate (within the meaning of Part IVA of the Income Tax Assessment Act 1936 ) divided by 40%.
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