Income Tax Assessment Act 1997
CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-6
-
THE IMPUTATION SYSTEM
Division 208
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Exempting entities and former exempting entities
Subdivision 208-F
-
Exempting accounts and franking accounts of exempting entities and former exempting entities
Operative provisions
SECTION 208-130 208-130 Franking credits arising because of status as exempting entity or former exempting entity
The following table sets out when a credit arises in the *franking account of an entity because of its status as an *exempting entity or *former exempting entity.
View history note
Hide history noteSECTION 208-130 208-130 Franking credits arising because of status as exempting entity or former exempting entity
The following table sets out when a credit arises in the *franking account of an entity because of its status as an *exempting entity or *former exempting entity.
| Franking credits arising because of status as an exempting entity or former exempting entity | |||
| Item | If: | A credit of: | Arises: |
| 1 | an entity becomes a *former exempting entity; and
the entity has a *franking deficit at the time it becomes a former exempting entity |
an amount equal to the franking deficit | immediately after the entity becomes a former exempting entity |
| 2 | an entity receives a *distribution *franked with an exempting credit; and | an amount worked out under subsection 208-165(1) | on the day on which the distribution is made |
| the entity is an *exempting entity at the time the distribution is made; and | |||
| the entity satisfies the *residency requirement for the income year in which the distribution is made and at the time the distribution is made; and | |||
| some part of the distribution is neither *exempt income nor *non-assessable non-exempt income of the entity; and | |||
| the entity is an *eligible continuing substantial member in relation to the distribution; and | |||
| the distribution is not affected by a manipulation of the imputation system mentioned in section 208-160 | |||
| 3 | the entity receives a *distribution *franked with an exempting credit; and | an amount worked out under subsection 208-170(1) | on the day on which the distribution is made |
| the entity is an *exempting entity at the time the distribution is made; and | |||
| the entity satisfies the *residency requirement for the income year in which the distribution is made and at the time the distribution is made; and | |||
| some part of the distribution is neither *exempt income nor *non-assessable non-exempt income of the entity; and | |||
| the entity is an *eligible continuing substantial member in relation to the distribution; and | |||
| the Commissioner has made a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no franking credit benefit (within the meaning of that section) is to arise in respect of a specified part of the distribution | |||
| 4 | a *distribution *franked with an exempting credit *flows indirectly to the entity (the
ultimate recipient
); and
the recipient of the distribution is an *eligible continuing substantial member in relation to the distribution; and except for the fact that the ultimate recipient is not an eligible continuing substantial member in relation to the distribution, it would have been entitled to a *franking credit because of the distribution had the distribution been made to the ultimate recipient |
an amount equal to the franking credit that would have arisen for the ultimate recipient if:
(a) the ultimate recipient had been an eligible continuing substantial member in relation to the distribution; and (b) the distribution had been made to the ultimate recipient; and (c) the distribution had been franked with a franking credit equal to the ultimate recipient ' s *share of the actual franking credit |
on the day on which the distribution is made |
| 5 | an *exempting entity makes a *franked distribution to the entity (the
recipient
); and
at the time the distribution is made: |
an amount worked out using the formula in subsection 208-165(2) | on the day on which the distribution is made |
| (a) the recipient is an exempting entity; and | |||
| (b) the recipient satisfies the *residency requirement; and | |||
| (c) the relationship between the entities is of the type mentioned in section 208-135; and | |||
| the recipient satisfies the residency requirement for the income year in which the distribution is made; and | |||
| some part of the distribution is neither *exempt income nor *non-assessable non-exempt income of the recipient; and | |||
| the distribution is not affected by a manipulation of the imputation system mentioned in section 208-160 | |||
| 6 | an *exempting entity makes a *franked distribution to the entity (the
recipient
); and
at the time the distribution is made: |
an amount worked out using the formula in subsection 208-170(2) | on the day on which the distribution is made |
| (a) the recipient is an exempting entity; and | |||
| (b) the recipient satisfies the *residency requirement; and | |||
| (c) the relationship between the entities is of the type mentioned in section 208-135; and | |||
| the recipient satisfies the residency requirement for the income year in which the distribution is made; and | |||
| some part of the distribution is neither *exempt income nor *non-assessable non-exempt income of the recipient; and | |||
| the Commissioner has made a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no franking credit benefit (within the meaning of that section) is to arise in respect of a specified part of the distribution | |||
| 7 | a *distribution made by an *exempting entity *flows indirectly to the entity (the
ultimate recipient
); and
the recipient of the distribution is an *eligible continuing substantial member in relation to the distribution; and except for the fact that the ultimate recipient is not an eligible continuing substantial member in relation to the distribution, it would have been entitled to a *franking credit because of the distribution had the distribution been made to the ultimate recipient |
an amount equal to the franking credit that would have arisen for the ultimate recipient if:
(a) the ultimate recipient had been an eligible continuing substantial member in relation to the distribution; and (b) the distribution had been made to the ultimate recipient; and (c) the distribution had been franked with a franking credit equal to the ultimate recipient ' s *share of the actual franking credit |
on the day on which the distribution is made |
| 8 | the Minister makes a determination under paragraph 208-185(4)(b) giving rise to a *franking credit for the entity | the amount of the credit specified in the determination | on the day specified in the determination |
| 9 | an *exempting debit arises for the entity under item 3, 5 or 8 of the table in section 208-120 | an amount equal to the exempting debit | when the exempting debit arises |
| 10 | a *former exempting entity becomes an *exempting entity; and
the entity has an *exempting surplus at the time it becomes an *exempting entity |
an amount equal to the *exempting surplus | immediately after it becomes an exempting entity |
Note:
Item 9 is designed to reverse out franking debits that arise in relation to a period during which the entity is an exempting entity. The entity will receive an exempting debit instead.
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