Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 204 - Anti-streaming rules  

Subdivision 204-D - Streaming distributions  

Operative provisions

SECTION 204-40   Amount of the franking debit  

204-40(1)  
The amount of the *franking debit arising because of a determination by the Commissioner under paragraph 204-30(3)(a) must not exceed:


(a) if the specified *distribution has been *franked - the difference between the amount of the *franking credit on the distribution and an amount worked out by multiplying the amount of the distribution by the highest *franking percentage at which a distribution to a favoured member is franked; or


(b) if the specified distribution, although *frankable, has not been franked - an amount worked out by multiplying the amount of the distribution by the highest franking percentage at which a distribution to a favoured member is franked; or


(c) if the specified distribution is *unfrankable - an amount worked out by multiplying the amount of the distribution by the highest franking percentage at which a distribution to a favoured member is franked; or


(d) if the specified benefit is the issue of bonus shares from a share premium account - an amount worked out by multiplying the amount debited to the share premium account in respect of the bonus shares by the highest franking percentage at which a distribution to a favoured member is franked; or


(e) if some other benefit is specified - an amount worked out by multiplying the value of the benefit by the highest franking percentage at which a distribution to a favoured member is franked.

204-40(2)  
In specifying the *franking debit, the Commissioner must have regard to:


(a) any *franking debit already arising in the *franking account of the entity under paragraph 203-50(1)(b) because the entity franked the specified *distribution in breach of the *benchmark rule; and


(b) any franking debit already arising in the franking account of the entity, because of the specified distribution or benefit, under section 204-15 (about linked distributions) or section 204-25 (about substituting *tax-exempt bonus shares for *franked distributions).


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