Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 205 - Franking accounts  

SECTION 205-30   Deferring franking deficit  

Object

205-30(1)    
The object of this section is to ensure that an entity does not avoid franking deficit tax by deferring the time at which a franking debit occurs in its franking account.

End of year deficit deferred

205-30(2)    
If:

(a) a corporate tax entity receives a refund of income tax within 3 months after 30 June in the year 2003 or a later year; and

(b) the refund is attributable to a period of 12 months ending at the end of 30 June in that year; and

(c) the franking account of the entity would have been in deficit, or in deficit to a greater extent, at the end of 30 June in that year if the refund had been received immediately before that time;

the refund is taken to have been paid to the entity immediately before that time.

Deficit on ceasing to be a franking entity deferred

205-30(3)    
If an entity ceases to be a franking entity during a period of 12 months ending on 30 June in the year 2003 or a later year, a refund of income tax is taken to have been paid to it immediately before it ceased to be a franking entity, for the purposes of subsection 205-25(3) , if:

(a) the refund is attributable to a period within that 12 months during which the entity was a franking entity; and

(b) the refund is paid within 3 months after the entity ceases to be a franking entity; and

(c) the franking account of the entity would have been in deficit, or in deficit to a greater extent, immediately before it ceased to be a franking entity, if the refund had been received before it ceased to be a franking entity.