INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 2 - Franking surplus or deficit  

Subdivision CC - Transitional provisions (life assurance companies)  

SECTION 160AQCNCG   EARLY BALANCING LIFE ASSURANCE COMPANY (2000-01 YEAR OF INCOME)  

160AQCNCG(1)   When franking credits arise under this section.  

Franking credits of a life assurance company arise under this section in relation to the 2000-01 year of income if:


(a) the company's 2000-01 year of income starts before 1 July 2000; and


(b) some of the company tax payable by the company in respect of the 2000-01 year of income is referable to taxable income derived before 1 July 2000; and


(c) one of the items in the following table is satisfied:


Circumstances in which this section applies
Item General description This item is satisfied if ...
1 Assessment after payment of PAYG instalment, that gave rise to franking credits (a) a class C franking credit of the company arose under section 160APVJ because of a payment by the company of an amount in respect of a PAYG instalment in respect of the year of income; and
(b) the company's company tax in respect of the year of income is assessed on a day (the adjustment day ) that occurs on or after the day on which the class C franking credit arose.
.
2 Payment of PAYG instalment after assessment (a) on a particular day (the adjustment day ), the company pays a PAYG instalment in respect of the year of income; and
(b) the company's company tax in respect of the year of income has been assessed before the adjustment day.
.
3 Company tax payment after assessment (a) on a particular day (the adjustment day ), the company pays an amount in respect of company tax that the company is liable to pay in respect of the year of income; and
(b) the company's company tax in respect of the year of income has been assessed before the adjustment day.
.
4 Substituted franking credit for payment of excess foreign tax credit on a particular day (the adjustment day ), a class C franking credit of the company arises under section 160APQB in relation to the year of income because of an amount paid by the company.

160AQCNCG(2)   Pre 1 July 2000 and post 1 July 2000 proportions.  

For the purposes of this section:


(a) the pre 1 July 2000 proportion is:


Company tax for 2000 - 01 year of income that is
  referable to taxable income derived before 1 July 2000  
Company tax for 2000 - 01 year of income


(b) the post 1 July 2000 proportion is:


Company tax for 2000 - 01 year of income that is
  referable to taxable income derived on or after 1 July 2000  
Company tax for 2000 - 01 year of income

160AQCNCG(3)   Franking credits for tax on income derived before 1 July 2000.  

On the adjustment day:


(a) a class A franking credit of the company arises in relation to the pre 1 July 2000 proportion of the amount paid or applied; and


(b) a class C franking credit of the company arises in relation to the pre 1 July 2000 proportion of the amount paid or applied.

160AQCNCG(4)   [Amount of Class A franking credit]  

The amount of the class A franking credit referred to in paragraph (3)(a) is equal to the adjusted amount in relation to the amount calculated using the formula:

Graphic

where:

company tax referable to pre 1 July 2000 income
is the company tax assessed to the company in respect of the year of income to the extent to which it is referable to taxable income derived before 1 July 2000.

general fund component of company tax referable to pre 1 July 2000 income
is so much of the company tax assessed to the company in respect of the year of income as is attributable to the general fund component and referable to taxable income derived before 1 July 2000.

160AQCNCG(5)   [Calculating amount in relation to pre 1 July 2000 proportion]  

The amount of the class C franking credit referred to in paragraph (3)(b) is equal to the adjusted amount in relation to the amount calculated using the formula:


Amount paid   ×   Pre 1 July 2000 proportion   ×       Standard component of
          companytax
referable to pre 1 July 2000 income
  Company tax referable to pre 1
          July 2000 income

where:

company tax referable to pre 1 July 2000 income
is the company tax assessed to the company in respect of the year of income to the extent to which it is referable to taxable income derived before 1 July 2000.

standard component of company tax referable to pre 1 July 2000 income
is so much of the company tax assessed to the company in respect of the year of income as is attributable to the standard component and referable to taxable income derived before 1 July 2000.

160AQCNCG(6)   Franking credits for tax on income derived on or after 1 July 2000.  

On the adjustment day, there also arises a class C franking credit of the company equal to the adjusted amount in relation to the final franking component of the post 1 July 2000 proportion of the amount paid.

160AQCNCG(7)   [``Final franking component'']  

The final franking component of the post 1 July 2000 proportion of the amount paid is so much of that proportion of the amount as is attributable to shareholders' funds income for that year of income that is derived on or after 1 July 2000.


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