Taxation Laws Amendment Act (No. 4) 1995 (171 of 1995)
SCHEDULE 2 AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 RELATING TO DIVIDEND IMPUTATION
159. Transitional
Liability to franking deficit tax
(1) A company is taken to be liable to pay tax under subsection 160AQJ(1) of the Income Tax Assessment Act 1936 in respect of its 1995-96 franking year if:
(a) at the company's class C conversion time the company is not a life assurance company; and
(b) at the company's class C conversion time the company has a class A franking deficit; and
(c) the company would, on the assumption that the amendments made by this Schedule did not apply in respect of the company for its 1995-96 franking year, have been liable to pay tax under subsection 160AQJ(1) of the Income Tax Assessment Act 1936.
(2) If a company is taken to be liable to pay tax as a result of the application of subsection (1), a class C franking credit of the company arises at the end of the company's 1995-96 franking year worked out using the formula:
Amount of the tax x 64/36
Liability to penalty for over-franking
(3) A company is taken to be liable to pay tax under subsection 160ARX(1) of the Income Tax Assessment Act 1936 in respect of its 1995-96 franking year if:
(a) at the company's class C conversion time the company is not a life assurance company; and
(b) at the company's class C conversion time the company has a class A franking deficit; and
(c) the company would, on the assumption that the amendments made by this Schedule did not apply in respect of the company for its 1995-96 franking year, have been liable to pay tax under subsection 160ARX(1) of the Income Tax Assessment Act 1936.
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