New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)
Schedule 27 Venture capital franking
Income Tax (Transitional Provisions) Act 1997
20 After Division 205
Insert:
Division 210 - Venture capital franking
210-1 Order of events provision
The venture capital sub-account of a PDF under Part IIIAA of the Income Tax Assessment Act 1936 (the old sub-account) is closed off at the end of 30 June 2002 and an opening balance is created in the PDF's venture capital sub-account under section 210-100 of the Income Tax Assessment Act 1997 as follows:
(a) any estimated venture capital debits in the old sub-account at the end of 30 June 2002 are washed out of the account under section 210-5; and
(b) then:
(i) in the case of a PDF whose 2001-02 franking year ends on 30 June 2002 under Part IIIAA of the Income Tax Assessment Act 1936 - the PDF's venture capital sub-account balance is converted under section 210-10 to a tax paid basis; and
(ii) in the case of a PDF whose 2001-02 franking year ends before 30 June 2002 under Part IIIAA of the Income Tax Assessment Act 1936 - the PDF's venture capital sub-account balance is converted under section 210-15 to a tax paid basis.
210-5 Washing estimated venture capital debits out of the old sub-account before conversion
If, under Part IIIAA of the Income Tax Assessment act 1936, the termination time in relation to an estimated venture capital debit of a PDF would, but for this section, occur after the end of 30 June 2002, it is taken to have occurred at the end of 30 June 2002.
210-10 Converting the venture capital sub-account balance to a tax paid basis - PDFs whose 2001-02 franking year ends on 30 June 2002
(1) This section applies to PDFs whose 2001-02 franking year ends on 30 June 2002 under Part IIIAA of the Income Tax Assessment Act 1936 (the 1936 Act ).
(2) If the PDF has a venture capital surplus under Part IIIAA of the 1936 Act at the end of 30 June 2002:
(a) no venture capital credit arises under section 160ASEE of that Act because of the surplus; and
(b) a venture capital credit arises on 1 July 2002 in the venture capital sub-account established under section 210-100 of the Income Tax Assessment Act 1997 for the PDF.
(3) The amount of the venture capital credit is worked out using the following formula:
210-15 Converting the venture capital sub-account balance to a tax paid basis - PDFs whose 2001-02 franking year ends before 30 June 2002
(1) This section applies to PDFs whose 2001-02 franking year ends before 20 June 2002 under Part IIIAA of the Income Tax Assessment 1936 (the 1936 Act ).
(2) If, but for this subsection, the PDF would have a venture capital surplus under Part IIIAA of the 1936 Act at the end of 30 June 2002 (the original surplus ):
(a) a venture capital debit equal to the original surplus is taken to arise for the PDF under Part IIIAA of the 1936 Act at the end of 30 June 2002; and
(b) a venture capital credit arises on 1 July 2002 in the venture capital sub-account established under section 210-100 of the Income Tax Assessment Act 1997 (the 1997 Act ) for the PDF.
(3) The amount of the venture capital credit is worked out using the formula:
(4) If, but for this subsection, the PDF would have a venture capital deficit under Part IIIAA of the 1936 Act at the end of 30 June 2002 (the original deficit ):
(a) a venture capital credit equal to the original deficit is taken to arise for the PDF under Part IIIAA of the 1936 Act at the end of 30 June 2002; and
(b) a venture capital debit arises on 1 July 2002 in the venture capital sub-account established under section 210-100 of the 1997 Act for the PDF.
(5) The amount of the venture capital debit is worked out using the formula:
