INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS

Division 13 - Transitional provisions arising from the introduction of class C franking credits and class C franking debits

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SECTION 160ASJ PROVISIONS RELATING TO COMPANIES THAT CEASE TO BE LIFE ASSURANCE COMPANIES

160ASJ(1) Conversion of class A franking surplus.

If:

(a) a company is a life assurance company at the company's class C conversion time; and

(b) at a particular time (the transition time ) after the company's class C conversion time, the company ceases to be a life assurance company (other than by ceasing to be a company); and

(c) at the transition time the company has a class A franking surplus;

then, immediately after the transition time:

(d) a class A franking debit of the company equal to that class A franking surplus arises; and

(e) a class C franking credit of the company also arises that is worked out using the formula:

Amount of class A franking surplus × ³⁹ / ₆₁ × ⁶⁴ / ₃₆

160ASJ(2) Conversion of class A franking deficit.

If:

(a) a company is a life assurance company at the company's class C conversion time; and

(b) at a particular time (the transition time ) after the company's class C conversion time, the company ceases to be a life assurance company (other than by ceasing to be a company); and

(c) at the transition time the company has a class A franking deficit;

then, immediately after the transition time:

(d) a class A franking credit of the company arises equal to that class A franking deficit; and

(e) a class C franking debit of the company also arises that is worked out using the formula:

Amount of class A franking deficit × ³⁹ / ₆₁ × ⁶⁴ / ₃₆

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