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 160AQCNCI   EARLY BALANCING LIFE ASSURANCE COMPANY (REFUNDS AND AMENDED ASSESSMENTS FOR 2000-01 YEAR OF INCOME)  

160AQCNCI(1)   When franking debits arise under this section.  

Franking debits of a life assurance company arise under this section if:


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


(b) some of the income tax payable by the company in respect of the 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 Refund after assessment the company receives a refund of a PAYG instalment, or a refund of company tax, in respect of the year of income on a day (the adjustment day ) that occurs on or after the day on which the company's company tax in respect of that year of income is assessed.
.
2 Amended assessment a class C franking debit of the company arises under section 160APZ in respect of the amount of a reduction in the company's company tax on a day (the adjustment day ) that occurs on or after the day on which the company's company tax in respect of that year of income is assessed.

160AQCNCI(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

160AQCNCI(3)   Franking debit for refund of tax on income derived before 1 July 2000.  

On the adjustment day:


(a) a class A franking debit of the company arises in relation to the pre 1 July 2000 proportion of the amount of the refund or reduction; and


(b) a class C franking debit of the company arises in relation to the pre 1 July 2000 proportion of the amount of the refund or reduction.

160AQCNCI(4)   [Calculation of para (3)(a) amount]  

The amount of the class A franking debit 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.

160AQCNCI(5)   [Calculation of para(3)(b) amount]  

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


Amount of
refund or  
reduction  
× Pre 1 July 2000
proportion
×   Standard component of
company tax 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.

160AQCNCI(6)   Franking debits for refund of tax on income derived on or after 1 July 2000.  

On the adjustment day, there also arises a class C franking debit of the company equal to the adjusted amount in relation to the franking component of the post 1 July 2000 proportion of the amount of the refund or reduction.

160AQCNCI(7)   [``franking component'']  

The franking component of the post 1 July 2000 proportion of the amount of the refund or reduction is so much of that proportion of that 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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