INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 12A - Venture capital franking  

Subdivision C - Venture capital credits and debits  

SECTION 160ASED   VENTURE CAPITAL CREDITS AND DEBITS  

160ASED(1)   Venture capital credits.  

A class C franking credit of a PDF is a venture capital credit of the PDF to the extent to which it is reasonably attributable to a payment of tax by the PDF in relation to a CGT event in relation to a qualifying SME investment of the PDF. This subsection does not apply to a class C franking credit that arises under subsection 160APL(3) .

Note 1:

Venture capital credits also arise under:

(a) section 160ASEE (carry-forward of surplus from previous franking year); and

(b) section 160ASEF (lapsing of estimated venture capital debit determinations); and

(c) subsection 160ASEN(3) (receipt of refund that creates or increases venture capital sub-account deficit).

Note 2:

Subsection 160APL(3) exclusion - the venture capital sub-account has its own provision for the carrying forward of end of franking year surpluses (see section 160ASEE ).

160ASED(2)   [Matters to be regarded]  

In determining the extent to which the class C franking credit is reasonably attributable to a payment of tax by the PDF in relation to the CGT event, have regard to:

(a) the extent to which the credit can reasonably be attributed to a payment of tax by the PDF in relation to its section 124ZZB SME assessable income for a year of income; and

(b) the extent to which the section 124ZZB SME assessable income can reasonably be attributed to the CGT event.

160ASED(3)   [When venture capital credit arises]  

Subject to subsection (4), the venture capital credit arises at the same time as the class C franking credit arises.

160ASED(4)   [Assessment day]  

Before a PDF's assessment day (the assessment day ) for a year of income, the PDF may elect to have the venture capital credits that would otherwise arise under subsection (1) during that year of income arise on the assessment day. If the PDF makes this election, the venture capital credits:

(a) are taken not to have arisen on the day on which the relevant class C franking credits arose; and

(b) are taken to arise on the assessment day.

160ASED(5)   [Earlier date]  

The PDF's assessment day for a year of income is the earlier of:

(a) the day on which the PDF furnishes its return of income for the year of income; or

(b) the day on which the Commissioner makes an assessment of the amount of the PDF's taxable income for that year of income under section 166 .

160ASED(6)   Venture capital debits.  

A class C franking debit of a PDF is a venture capital debit of the PDF to the extent to which it is reasonably attributable to a reduction amount in relation to a venture capital credit of the PDF.

Note:

Venture capital debits also arise under:

(a) section 160ASEG (declaration is made attaching venture capital credits to a dividend); and

(b) section 160ASEI (estimated venture capital debit determinations); and

(c) subsection 160ASEM(2) (failure to empty the sub-account in certain circumstances); and

(d) section 160AQCBA (streaming venture capital franking rebate benefits) (see section 160ASEJ ); and

(e) section 160ASEH (PDF's total venture capital credits for the franking year exceeding the PDF's CGT limit for the relevant year of income).

160ASED(7)   [Reduction amount]  

A reduction amount in relation to a venture capital credit of the PDF is:

(a) an amount received as a refund of a payment of tax; or

(b) an amount, in respect of a credit under paragraph 221AZM(1)(b) or (c), applied by the Commissioner against a liability of the PDF; or

(c) an amount applied by the Commissioner against a liability of the PDF; or

(d) a reduction mentioned in section 160APZ ;

to the extent to which the amount or reduction is attributable to a payment of tax that gives rise to a venture capital credit of the PDF.

160ASED(8)   [Venture capital debit]  

Subject to subsection (9), the venture capital debit arises at the same time as the relevant class C franking debit arises.

160ASED(9)   [When debit arises]  

If the venture capital credit referred to in subsection (7) does not arise until after the relevant class C franking debit arises, the venture capital debit arises when the venture capital credit arises.

Note:

This subsection deals with the situation in which the PDF elects under subsection (4) to have its venture capital credits arise on its assessment day. It brings the related intervening venture capital debits to account on the same day.