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

Schedule 5   Franking deficit tax

Income Tax (Transitional Provisions) Act 1997

5   After section 205-70

Insert:

205-71 Modification of franking deficit tax offset rules

(1) This section applies to events that occur on or after 1 July 2002 and before the start of the 2004-05 income year.

(2) The 30% reductions for an entity in steps 1 and 2 of the method statement in subsection 205-70(2) of the Income Tax Assessment Act 1997 apply only to franking deficit tax that is attributable to franking debits of the entity:

(a) that arose under table item 1, 3, 5 or 6 in section 205-30 of the Income Tax Assessment Act 1997 for the relevant income year; and

(b) if the entity has franking debits covered by paragraph (a) for the relevant income year - that arose under table item 2 in that section of that Act for the relevant income year.

(3) The 30% reductions in steps 1 and 2 of the method statement in subsection 205-70(2) of the Income Tax Assessment Act 1997 do not apply in working out the amount of the tax offset to which an entity is entitled for the relevant year if the Commissioner determines in writing, on application by the entity in the approved form, that the excess referred to in those steps was due to events outside the control of the entity.

(4) A determination under subsection (3) is not a legislative instrument.