Tax Laws Amendment (2006 Measures No. 2) Act 2006 (58 of 2006)

Schedule 5   Franking deficit tax

Income Tax Assessment Act 1997

1   Subsection 205-70(2) (method statement, steps 1 and 2)

Repeal the steps, substitute:

Step 1. Work out the total amount of *franking deficit tax that is covered by paragraph (1)(a).

Then, subject to subsections (5) and (6), reduce so much of it as is attributable to *franking debits to which subsection (8) applies by 30% if that part exceeds 10% of the total amount of *franking credits that arose in the entity's *franking account for the relevant year.

Step 2. Work out the total amount of *franking deficit tax that is covered by paragraph (1)(b) for a previous income year.

Then, subject to subsections (5) and (6), reduce so much of it as is attributable to *franking debits to which subsection (8) applies by 30% if that part exceeds 10% of the total amount of *franking credits that arose in the entity's *franking account for that previous income year.