Key points

The key points that arise in relation to amendments to the Tax Act relating to co-operative companies are as follows:

  • Subject to available franking credits, a co-operative company is able to choose to frank distributions to shareholders from assessable income for the current income year.
  • A co-operative company is 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 is still entitled to a deduction for unfranked distributions of assessable income.
  • For the purposes of claiming a deduction for unfranked distributions, a co-operative company is able to treat distributions paid within 3 months after the end of an income year as if they were paid on the last day of the income year.
  • Members of a co-operative company who receive a franked distribution must include the franking credit attached to the distribution in their assessable income, and are entitled to a tax offset equal to the credit included in their income.
  • Co-operative companies now have access to accumulated franking credits that may have arisen where a co-operative company has retained profits.

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

    Last modified: 17 Dec 2015QC 17074