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

Schedule 1   AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

Part 3   DIVIDEND IMPUTATION

86   Transitional - modification of dividend imputation provisions resulting from reduction in the company tax rate

(1) If, after 17 February 1994, any of the following events occurs:

(a) a company makes a payment of tax, other than an initial payment under section 221AP of the Principal Act, in respect of the 1993-94 year of income during the 1993-94 franking year of the company; or

(b) a company receives a refund under Division 1B of Part VI of the Principal Act in respect of an amount to which paragraph (a) applies; or

(c) a company receives a refund of an amount to which paragraph (a) applies where the refund is covered by section 160APYBA of the Principal Act; or

(d) the Commissioner applies an amount paid by a company and the application is covered by section 160APYBA of the Principal Act in respect of an amount to which paragraph (a) applies; or

(e) an amendment is made to an assessment of the company tax payable by a company for the 1993-94 year of income that was made before the end of the 1993-94 franking year of the company, other than an amendment where:

(i) the assessment was made on or before 17 February 1994; and

(ii) the amendment effects a reduction in the liability of the company; or

(f) an amount is calculated, as a result of an event covered by a preceding paragraph, using a formula in any of the following provisions:

(i) section 160APVBA or 160APVD of the Principal Act;

(ii) sections 160AQCE to 160AQCK (inclusive) of the Principal Act;

then in applying Part IIIAA of the Principal Act in relation to the event, despite paragraphs (a) and (aa) of the definition of "applicable general company tax rate" in section 160APA of that Act, a reference to the general company tax rate is, and is taken to have always been, a reference to 39%.

(2) If subitem (1) would result in a company having a franking deficit, or an increased franking deficit, at the end of the 1993-94 franking year, subitem (1) does not apply in relation to the company, but:

(a) the class A franking account balance of the company at the start of the 1994-95 franking year is taken to be nil; and

(b) a class A franking debit of the company equal to the amount of the franking deficit, or the amount of the increase in the franking deficit, arises on the day when this item commences.

(3) In this item:

"Principal Act" means the Income Tax Assessment Act 1936;

"1993-94 franking year", in relation to a company, means:

(a) if a franking year of the company:

(i) is covered by paragraph (a) or (b) of the definition of "franking year" in section 160APA of the Principal Act; and

(ii) begins after 31 December 1992 and before 1 July 1993; that franking year; or

(b) if a franking year of the company:

(i) is covered by paragraph (c) of that definition; and

(ii) begins on 1 July 1993; that franking year.

"1994-95 franking year", in relation to a company, means the franking year of the company immediately following the 1993-94 franking year.