This section explains amendments that allow a co-operative company to frank distributions made to their members from assessable income for the current income year.

The term 'co-operative company' means a co-operative established under state legislation but which qualifies as a co-operative under the tax act.

Key points to note:

  • Subject to available franking credits, a cooperative company will be able to choose to frank distributions to shareholders from assessable income for the current income year.
  • A co-operative company will be required to provide a distribution statement, in the approved form, to its members where it allocates franking credits to the distributions made to the members.
  • A co-operative company will still be entitled to a deduction for unfranked distributions of assessable income.
  • For the purposes of claiming a deduction for unfranked distributions, a co-operative company will be able to treat distributions paid within three months after the end of an income year as if they were paid during the income year.
  • Members of a co-operative company who receive a franked distribution will include the franking credit attached to the distribution in their assessable income, and be entitled to a tax offset equal to the credit included in their income.
  • Co-operative companies will now have access to accumulated franking credits that may have arisen where a co-operative company has retained profits.

These amendments apply to distributions made on or after 1 July 2002.

    Last modified: 09 Jul 2014QC 17505