The intercorporate dividend rebate will continue to be available only in relation to unfranked dividends paid within a wholly-owned group.
The continued availability of this rebate is to ensure that small and medium sized businesses are not disadvantaged while they are preparing to make the election to consolidate.
This rebate was turned off for unfranked dividends paid on or after 1 July 2003 for those company groups that have an income year that ends on 30 June. However, if the company group's date of consolidation occurs before 1 July 2003, the rebate will not be available for unfranked dividends paid on or after the date of consolidation.
There are some transitional rules for company groups whose income year does not end on 30 June 2003. Under these transitional rules, the rebate will continue to apply to unfranked dividends paid after 30 June 2003, if the date of consolidation is the first day of the first income year starting after 30 June 2003, but before 1 July 2004.
For more information on Consolidation, go to the Consolidation homepage.