A corporate tax entity may apply to the Commissioner in writing, either before or after a distribution is made, for permission to depart from the benchmark rule.
The power to permit a departure from the benchmark rule will be exercised by the Commissioner only in extraordinary circumstances. Generally, the circumstances justifying a departure would need to be unforeseeable and beyond the control of the entity, its members and controllers. A change in ownership of an entity would rarely amount to extraordinary circumstances sufficient to warrant a departure from the benchmark rule.
An entity seeking permission to depart from the benchmark rule should include all relevant information in support of the application. The factors that the Commissioner must consider in making a decision to allow a departure from the benchmark rule are:
- the entity's reasons for wanting to depart from the benchmark rule
- the extent of the departure
- whether the entity has previously sought the exercise of the Commissioner's power to permit the departure
- whether a member of the entity will be disadvantaged by the departure
- whether a member of the entity will receive franking benefits in preference to other members of the entity as a result of the departure, and
- any other matter that the Commissioner considers relevant.
A distribution that is franked in accordance with the Commissioner's permission to depart from the benchmark rule is taken to comply with the benchmark rule.