Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 203 - Benchmark rule  

Operative provisions  

SECTION 203-55   Commissioner ' s powers to permit a departure from the benchmark rule  

Powers of the Commissioner

203-55(1)    
The Commissioner may, on application by an entity, make a determination in writing permitting the entity to *frank a *distribution at a *franking percentage that differs from the entity ' s *benchmark franking percentage for the *franking period in which the distribution is made.

203-55(2)    
Because the *benchmark rule is an integral part of the imputation system, the Commissioner ' s powers under this section may only be exercised in extraordinary circumstances.

Matters to which the Commissioner must have regard in exercising the power

203-55(3)    
In deciding whether there are extraordinary circumstances justifying the exercise of the Commissioner ' s power to make a determination under subsection (1), the Commissioner must have regard to:

(a) the entity ' s reasons for departing, or proposing to depart, from the *benchmark rule; and

(b) the extent of the departure, or proposed departure, from the benchmark rule; and

(c) if the circumstances that give rise to the entity ' s application are within the entity ' s control, the extent to which the entity has sought the exercise of the Commissioner ' s powers under this section in the past; and

(d) whether a *member of the entity has been or will be disadvantaged as a result of the departure, or proposed departure, from the benchmark rule; and

(e) whether a *member of the entity will receive greater *imputation benefits than another member of the entity because a distribution *franked at a *franking percentage that differs from the *benchmark franking percentage for the *franking period is made to one of them; and

(f) any other matters that the Commissioner considers relevant.

When may the powers be exercised?

203-55(4)    
The Commissioner may make a determination under subsection (1) either before or after the *frankable distribution is made.

Consequence of the Commissioner exercising the power under this section

203-55(5)    
An allocation of a *franking credit at a percentage specified by the Commissioner in a determination under subsection (1) is taken to comply with the *benchmark rule.

Applying to the Commissioner

203-55(6)    
The entity must:

(a) make its application under this section in writing; and

(b) include in the application all information relevant to the matters to which the Commissioner must have regard under subsection (3).

Review

203-55(7)    
If the entity or a *member of the entity is dissatisfied with the determination under subsection (1), the entity or member may object to it in the manner set out in Part IVC of the Taxation Administration Act 1953 .