Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 204 - Anti-streaming rules  

Subdivision 204-B - Linked distributions  

Operative provisions

SECTION 204-15   Linked distributions  

Franking debit arises where a distribution by one entity is substituted for a distribution by another

204-15(1)    
This section gives rise to a *franking debit if:

(a) the exercise of a choice or selection by a *member of an entity (the first entity ); or

(b) the member ' s failure to exercise a choice or selection;

has the effect of determining (to any extent) that another entity makes to one of its members a *distribution (the linked distribution ) that is:

(c) in substitution (in whole or in part) for a distribution by the first entity to that member or any other member of the first entity; and

(d) unfranked, or *franked at a *franking percentage that differs from the first entity ' s *benchmark franking percentage for the *franking period in which the linked distribution is made.

Note:

Division 205 deals with a corporate tax entity ' s franking account and sets out when a debit, known as a franking debit, arises in that account.

Franking account in which the debit arises

204-15(2)    
The debit arises in the *franking account of the entity with the higher *benchmark franking percentage for the *franking period in which the linked distribution is made.

Amount of the debit

204-15(3)    
The debit is equal to the one that would arise in that *franking account if the entity had made a *franked distribution, equal to the linked distribution, with a *franking percentage equal to the *benchmark franking percentage for that entity.

When does the debit arise

204-15(4)    
The debit arises on the day on which the linked distribution is made.

Debit is in addition to any other franking debit arising because of the linked distribution

204-15(5)    
The debit is in addition to any other debit that arises in an entity ' s *franking account because of the linked distribution.

Where an entity has no benchmark franking percentage

204-15(6)    
If an entity has no *benchmark franking percentage for the *franking period in which the linked distribution is made, this section applies as if:

(a) in a case where the linked distribution has a *franking percentage of less than 50% - the entity had a benchmark franking percentage of 100% for that period; and

(b) in a case where the linked distribution has a franking percentage equal to or greater than 50% - the entity had a benchmark franking percentage of 0% for that period.