Income Tax Assessment Act 1997
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Hide history noteSECTION 204-15 Linked distributions
Franking debit arises where a distribution by one entity is substituted for a distribution by another
204-15(1)
This section gives rise to a *franking debit if:
(a) the exercise of a choice or selection by a *member of an entity (the first entity ); or
(b) the member ' s failure to exercise a choice or selection;
has the effect of determining (to any extent) that another entity makes to one of its members a *distribution (the linked distribution ) that is:
(c) in substitution (in whole or in part) for a distribution by the first entity to that member or any other member of the first entity; and
(d) unfranked, or *franked at a *franking percentage that differs from the first entity ' s *benchmark franking percentage for the *franking period in which the linked distribution is made.
Note:
Division 205 deals with a corporate tax entity ' s franking account and sets out when a debit, known as a franking debit, arises in that account.
Franking account in which the debit arises
204-15(2)
The debit arises in the *franking account of the entity with the higher *benchmark franking percentage for the *franking period in which the linked distribution is made.
Amount of the debit
204-15(3)
The debit is equal to the one that would arise in that *franking account if the entity had made a *franked distribution, equal to the linked distribution, with a *franking percentage equal to the *benchmark franking percentage for that entity.
When does the debit arise
204-15(4)
The debit arises on the day on which the linked distribution is made.
Debit is in addition to any other franking debit arising because of the linked distribution
204-15(5)
The debit is in addition to any other debit that arises in an entity ' s *franking account because of the linked distribution.
Where an entity has no benchmark franking percentage
204-15(6)
If an entity has no *benchmark franking percentage for the *franking period in which the linked distribution is made, this section applies as if:
(a) in a case where the linked distribution has a *franking percentage of less than 50% - the entity had a benchmark franking percentage of 100% for that period; and
(b) in a case where the linked distribution has a franking percentage equal to or greater than 50% - the entity had a benchmark franking percentage of 0% for that period.
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