INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 7 - Dividends paid to trusts and partnerships  

Subdivision BA - Maximum franking credits, maximum franking rebates, and maximum potential rebate amounts (and allowable deductions), for taxpayers who elect under section 160APHR  

SECTION 160AQZG   MAXIMUM POTENTIAL REBATE AMOUNT AND ALLOWABLE DEDUCTION  

160AQZG(1)   [Ceiling amount not to be exceeded]  

If:

(a) any dividends are paid on shares during the year of income; and

(b) the electing taxpayer is a taxpayer mentioned in paragraph 160APHR(1)(a), (b), (j) or (k) who held the shares or had interests in the shares; and

(c) the shares or interests are managed by or on behalf of the electing taxpayer as or in a discrete fund; and

(d) the election under section 160APHR related to the shares or interests;

the sum of the amounts represented by the letters PR and EPR in the formulas in the definition of potential rebate amount in section 160APA in relation to the electing taxpayer in respect of all those dividends is not to exceed the ceiling amount in relation to the fund in relation to the year of income.

160AQZG(2)   [``ceiling amount'']  

The ceiling amount , in relation to the fund in relation to the year of income, is the notional total rebate amount in relation to the fund in relation to the year of income increased by:

(a) if paragraph (b) does not apply - 20%; or

(b) if a different percentage is prescribed by the regulations in relation to the index by reference to which the relevant benchmark portfolio of shares that applies in respect of the fund is determined - that percentage.

160AQZG(3)   [``notional total rebate amount'']  

The notional total rebate amount , in relation to the fund in relation to the year of income, is:

(a) subject to paragraph (b), an amount equal to the sum of the rebates of tax to which a taxpayer (the notional taxpayer ) who is a natural person and a resident of Australia would be entitled under this Part in respect of dividends on shares in the benchmark portfolio of shares that applies in respect of the fund (being shares that become ex dividend during the year of income) if:

(i) those dividends were paid to the notional taxpayer in the year of income; and

(ii) the notional taxpayer were a qualified person under section 160APHO in relation to those dividends; or

(b) if the regulations provide another method of calculating notional total rebate amounts in relation to funds managed in the year of income by or on behalf of a class of taxpayers in which the electing taxpayer is included - the amount calculated in relation to the fund in accordance with that method.

160AQZG(4)   [Calculation - first acquisition]  

If the first acquisition of shares or interests in shares that are managed by or on behalf of the electing taxpayer as or in a particular discrete fund occurred during the year of income, the notional total rebate amount in relation to the fund in relation to the year of income is to be worked out as if the year of income did not include the part of the year of income before the acquisition occurred.

160AQZG(5)   [Calculation - all shares and interests disposed of]  

If all the shares and interests in shares that were managed by or on behalf of the electing taxpayer as or in a particular discrete fund are disposed of during the year of income, the notional total rebate amount in relation to the fund in relation to the year of income is to be worked out as if the year of income did not include the part of the year of income after the last disposal of any of the shares or interests occurred.

160AQZG(6)   [Excess is allowable deduction]  

If the sum of the amounts referred to in subsection (1) in relation to the electing taxpayer in respect of dividends paid during the year of income exceeds the ceiling amount referred to in that subsection in relation to the year of income, the excess is allowable as a deduction from the electing taxpayer's assessable income of the year of income.