Taxation Laws Amendment Act (No. 2) 1999 (93 of 1999)

Schedule 5   Franking of dividends by exempting companies and former exempting companies

Income Tax Assessment Act 1936

46   Subsections 160AQCBA(8) to (12)

Repeal the subsections, substitute:

Effect of determination of franking debit or exempting debit

(8) If the Commissioner makes a determination under paragraph (3)(a):

(a) on the day on which notice of the determination is served in writing on the company, a franking debit or exempting debit of the company arises in respect of the dividend or other benefit; and

(b) the amount of the franking debit or exempting debit is worked out in accordance with subsections (9) to (13).

Franking debit or exempting debit in respect of partly franked dividend

(9) In the case of a franking debit or exempting debit in respect of a partly franked or partly exempted dividend, the amount of the franking debit or exempting debit is the difference between the franked amount or the exempted amount and the amount that would have been the franked amount or exempted amount if the dividend had been franked to the maximum extent to which the dividends paid to the advantaged shareholders were franked.

Franking debit in respect of unfranked dividend

(10) In the case of a franking debit in respect of an unfranked dividend, the amount of the franking debit is the amount that would have been the franked amount if the dividend had been franked to the maximum extent to which the dividends paid to the advantaged shareholders were franked.

Exempting debit in respect of dividend that has not been franked in accordance with section 160AQFA

(10A) In the case of an exempting debit in respect of a dividend that has not been franked in accordance with section 160AQFA, the amount of the exempting debit is the amount that would have been the franked amount if the dividend had been franked to the maximum extent to which the dividends paid to the advantaged shareholders were franked.

Franking debit or exempting debit in respect of bonus shares from share premium account

(11) In the case of a franking debit or exempting debit in respect of a benefit by way of the issue of bonus shares from a share premium account, the amount of the franking debit or exempting debit is the amount that, if the company had paid a dividend of an amount equal to the amount debited to the share premium account in respect of the bonus shares and had franked the dividend to the maximum extent to which the dividends paid to the advantaged shareholders were franked, would have been the franked amount of the dividend.

Franking debit or exempting debit in respect of any other benefit

(12) In the case of a franking debit or exempting debit in respect of any other benefit, the amount of the franking debit or exempting debit is the amount that, if the company had paid a dividend of an amount equal to the value of the benefit at the time when it was paid and had franked the dividend to the maximum extent to which the dividends paid to the advantaged shareholders were franked, would have been the franked amount of the dividend.