Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 220 - Imputation for NZ resident companies and related companies  

Subdivision 220-C - Modifications of other Divisions of this Part  

NZ franking companies' exempting accounts

SECTION 220-605   Effect on exempting account if NZ franking choice ceases to be in force  

220-605(1)    
This section has effect if:

(a) a company has made an * NZ franking choice; and

(b) the choice is revoked or cancelled at a time (the end time ); and

(c) immediately before the end time:

(i) the company is a foreign resident; and

(ii) the company is a * former exempting entity.

Exempting debit if exempting surplus just before end time

220-605(2)    
An * exempting debit arises in the company ' s * exempting account at the end time if the account was in * surplus immediately before that time. The amount of the debit equals the * exempting surplus.

If exempting deficit just before end time

220-605(3)    
If the company ' s * exempting account was in * deficit immediately before the end time:

(a) a * franking debit equal to that deficit arises in the company ' s * franking account immediately before the end time; and

(b) an * exempting credit equal to that deficit arises in the company ' s exempting account at the end time.