INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 2 - Franking surplus or deficit  

Subdivision C - General provisions on franking debits  

SECTION 160APX   UNDER-FRANKING  

160APX(1)   [Class A franking debit arises]  

Where:

(a) the class A required franking amount for a frankable dividend paid by a company on a particular day is not less than 10% of the amount of the dividend; and

(b) that class A required franking amount exceeds the class A franked amount of the dividend;

there arises on that day a class A franking debit of the company equal to the excess referred to in paragraph (b).

160APX(1A)   [Class B franking debit arises]  

If:

(a) the class B required franking amount for a frankable dividend paid by a company on a particular day is not less than 10% of the amount of the dividend; and

(b) that class B required franking amount exceeds the class B franked amount of the dividend;

there arises on that day a class B franking debit of the company equal to the excess referred in to paragraph (b).

160APX(1B)   [Class C franking debit arises]  

If:

(a) the class C required franking amount for a frankable dividend paid by a company on a particular day is not less than 10% of the amount of the dividend; and

(b) that class C required franking amount exceeds the class C franked amount of the dividend;

there arises on that day a class C franking debit of the company equal to the excess referred to in paragraph (b).

160APX(2)   [Extent to which dividend franked]  

If the declaration made in relation to the dividend for the purposes of section 160AQF specifies a percentage for the purposes of subsection 160AQF(1A) , the dividend shall be taken for the purposes of subsection (1) of this section to be a franked dividend to the extent of the percentage so specified.

160APX(4)   [Entitlement]  

A taxpayer is not entitled to a rebate of tax under subsection (1) if:

(a) the trust amount was paid:

(i) in respect of an interest in the trust that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

160APX(5)   [Interpretation]  

In subsection (4):

commencing time
means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid:
a trust amount is taken to have been paid to a taxpayer if it is included in the taxpayer's assessable income.

160APX(6)   [Determination]  

In determining whether the payment of the trust amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.