INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 7 - Dividends paid to trusts and partnerships  

Subdivision B - Rebates for beneficiaries, trustees and partners  

SECTION 160AQX   FRANKING REBATE FOR CERTAIN BENEFICIARIES  

160AQX(1)   [When entitled to rebate]  

Where:

(a) a trust amount is included in the assessable income of a taxpayer of a year of income;

(b) the taxpayer is:

(i) a natural person other than a trustee; or

(ii) a registered organisation (other than a trustee); or

(iii) an exempt institution whose exempt status is disregarded in relation to the trust amount under section 160ARDAB ; and

(c) there are one or more of the following:

(i) a class A flow-on franking amount in relation to the trust amount;

(ii) a class B flow-on franking amount in relation to the trust amount;

(iii) a class C flow-on franking amount in relation to the trust amount; and

(ca) the taxpayer is a qualified person in relation to the relevant franked dividend for the purposes of Division 1A;

the taxpayer is entitled to a rebate of tax in the taxpayer's assessment in respect of income of the year of income of an amount equal to whichever of the following is applicable:

(d) if only subparagraph (c)(i) applies - the class A potential rebate amount in relation to the trust amount;

(e) if only subparagraph (c)(ii) applies - the class B potential rebate amount in relation to the trust amount;

(ea) if only subparagraph (c)(iii) applies - the class C potential rebate amount in relation to the trust amount;

(f) if subparagraphs (c)(i) and (ii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class B potential rebate amount in relation to the trust amount;

(g) if subparagraphs (c)(i) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class C potential rebate amount in relation to the trust amount;

(h) if subparagraphs (c)(ii) and (iii) apply - the sum of:

(i) the class B potential rebate amount in relation to the trust amount; and

(ii) the class C potential rebate amount in relation to the trust amount;

(i) if subparagraphs (c)(i), (ii) and (iii) apply - the sum of:

(i) the class A potential rebate amount in relation to the trust amount; and

(ii) the class B potential rebate amount in relation to the trust amount; and

(iii) the class C potential rebate amount in relation to the trust amount.

160AQX(2)   [No rebate]  

If a determination is made under paragraph 177EA(5)(b) in respect of the whole of a dividend or distribution that is represented by the trust amount, the taxpayer is not entitled to a rebate of tax under subsection (1).

160AQX(3)   [Reduction]  

If a determination is made under paragraph 177EA(5)(b) in respect of a part of a dividend or distribution that is represented by the trust amount, the rebate of tax to which the taxpayer would otherwise be entitled under subsection (1) is reduced by the same proportion as that part of the dividend or distribution bears to the whole of the dividend or distribution.

160AQX(4)   [Where no entitlement]  

A taxpayer is not entitled to a rebate of tax under subsection (1) if:

(a) the trust amount was paid:

(i) in respect of an interest in the trust that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

160AQX(5)   [Interpretation]  

In subsection (4):

commencing time
means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid
: a trust amount is taken to have been paid to a taxpayer if it is included in the taxpayer's assessable income.

160AQX(6)   [Whether reasonably regarded as equivalent]  

In determining whether the payment of the trust amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.