Taxation Laws Amendment Act (No. 4) 1994 (181 of 1994)

Schedule 1   AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

Part 3   DIVIDEND IMPUTATION

38   After section 160AQCC

Insert:

Life assurance companies - debit reducing section 160APM or 160APMAA credit

"160AQCCA. (1) If:

(a) on a particular day, a class B franking credit of a life assurance company arises:

(i) under section 160APM in relation to an instalment that the company is required to pay under section 221AZK in respect of a year of income (also the 'current year of income'); or

(ii) under section 160APMAA in relation to an amount that the company is required to pay under subsection 221AZR(1) in respect of a year of income (also the 'current year of income'); and

(b) a notice of an original company tax assessment for the current year of income has not been served, or been taken to have been served, on the company on or before that day;

then a class B franking debit of the company worked out under subsection (2) of this section arises on that day.

"(2) The amount of the franking debit is equal to the adjusted amount in relation to the amount calculated for the current year of income using the formula:

Statutory factor * Amount paid * ((Preceding year's company tax – Non-fund component of prededing year's company tax) / Preceding year's company tax)

where:

'Statutory factor' means 1.0;

Note: Statutory factor is used and modified in section 160APVH.

'Preceding year's company tax' means the company tax assessed to the company for the year of income (the 'preceding year of income') that immediately preceded the current year of income;

'Non-fund component of preceding year's company tax' means so much of the company tax assessed to the company for the preceding year of income as is attributable to the non-fund component.

"(3) If:

(a) on a particular day, a class B franking credit of a life assurance company arises under:

(i) section 160APM in relation to an instalment that the company is required to pay under section 221AZK in respect of a year of income (the 'current year of income'); or

(ii) under section 160APMAA in relation to an amount that the company is required to pay under subsection 221AZR(1) in respect of a year of income (also the 'current year of income'); and

(b) either:

(i) before that day, a notice of an original company tax assessment for the current year of income has been served, or is taken to have been served, on the company; or

(ii) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company;

then a class B franking debit of the company worked out under subsection (4) of this section arises on the later of the particular day and the day on which the notice is served or taken to be served.

"(4) The amount of the franking debit is equal to the adjusted amount in relation to the amount calculated using the formula:

Statutory factor * Amount paid * ((Current year's company tax – Non-fund component of current year's company tax) / Current year's company tax)

where

'Statutory factor' means 1.0;

Note: Statutory factor is used and modified in section 160APVH.

'Current year's company tax' means the company tax assessed to the company for the current year of income;

'Non-fund component of current year's company tax' means so much of the company tax assessed to the company for the current year of income as is attributable to the non-fund component.

Life assurance companies - debit reversing subsection 160APVA(1) credit

"160AQCCB. If:

(a) on a particular day, a class B franking credit of a life assurance company arises under subsection 160APVA(1) in relation to a refund received by the company in respect of an instalment for a year of income (the 'current year of income'); and

(b) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company;

then a class B franking debit of the company equal to the amount of the class B franking credit arises on the day on which the notice is served, or taken to be served.".