INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 5 - Franking of dividends  

Subdivision A - Franking  

SECTION 160AQF   WHAT CONSTITUTES FRANKING WITH A FRANKED AMOUNT  

160AQF(1)   [Resolution or declaration re current dividend]  

Where:

(a) a frankable dividend (in this subsection called the ``current dividend'' ) is paid to a shareholder in a company; and

(b) the company is a resident at the time of payment; and

(c) if the current dividend is paid under a resolution:

(i) before the reckoning day for the current dividend, the company makes a declaration that each dividend to which the resolution relates is a class A franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration in relation to the dividend; and

(ii) the percentage so specified is the same for each of the dividends to which the resolution relates; and

(d) if the current dividend is not paid under a resolution - the company makes a declaration before the reckoning day for the current dividend that the current dividend is a class A franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration;

the current dividend shall be taken to have been class A franked to the extent of the amount calculated in accordance with the formula:

CD   ×   SP

where:

CD is the amount of the current dividend; and

SP is the percentage specified in the declaration in relation to the dividend.

Note:

Because of subsection 46M(3) and paragraph 46M(4)(a) , paragraph (c) of this subsection does not apply to dividends that are taken by subsection 46M(3) or paragraph 46M(4)(a) not to be frankable dividends.

160AQF(1AA)   [Dividend deemed class B franked]  

If:

(a) a frankable dividend (in this subsection called the ``current dividend'' ) is paid to a shareholder in a company; and

(b) the company is a resident at the time of payment; and

(c) if the current dividend is paid under a resolution:

(i) before the reckoning day for the current dividend, the company makes a declaration that each dividend to which the resolution relates is a class B franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration in relation to the dividend; and

(ii) the percentage so specified is the same for each of the dividends to which the resolution relates; and

(d) if the current dividend is not paid under a resolution - the company makes declaration before the reckoning day for the current dividend that the current dividend is a class B franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration;

the current dividend is taken to have been class B franked to the extent of the amount worked out using the formula:

Current dividend   ×   Specified percentage

where:

`` Current dividend '' means the amount of the current dividend;

`` Specified percentage '' means the percentage specified in the declaration in relation to the dividend.

Note:

Because of subsection 46M(3) and paragraph 46M(4)(a) , paragraph (c) of this subsection does not apply to dividends that are taken by subsection 46M(3) or paragraph 46M(4)(a) not to be frankable dividends.

160AQF(1AAA)   [Dividend deemed class C franked]  

If:

(a) a frankable dividend (the current dividend ) is paid to a shareholder in a company; and

(b) the company is a resident at the time of payment; and

(c) if the current dividend is paid under a resolution:

(i) before the reckoning day for the current dividend, the company makes a declaration that each dividend to which the resolution relates is a class C franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration in relation to the dividend; and

(ii) the percentage so specified is the same for each of the dividends to which the resolution relates; and

(d) if the current dividend is not paid under a resolution - the company makes a declaration before the reckoning day for the current dividend that the current dividend is a class C franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration;

the current dividend is taken to have been class C franked to the extent of the amount worked out using the formula:

Current dividend   ×   Specified percentage

where:

Current dividend means the amount of the current dividend.

Specified percentage means the percentage specified in the declaration in relation to the dividend.

Note:

Because of subsection 46L(3) and paragraph 46L(4)(a) , paragraph (c) of this subsection does not apply to dividends that are taken by subsection 46L(3) or paragraph 46L(4)(a) not to be frankable dividends.

160AQF(1AB)   [Dividend deemed not class A or class B franked]  

Despite subsections (1) and (1AA), a dividend is taken not to have been class A franked or class B franked if the sum of:

(a) the class A franked amount of the dividend; and

(b) the class B franked amount of the dividend;

exceeds the amount of the dividend.

160AQF(1AC)   [Dividend deemed not class A or class C franked]  

Despite subsections (1) and (1AAA), a dividend is taken not to have been class A franked or class C franked if the sum of:

(a) the class A franked amount of the dividend; and

(b) the class C franked amount of the dividend;

exceeds the amount of the dividend.

160AQF(1A)   [Declaration of higher percentage re sufficient distribution]  

Where a company that is making a declaration for the purposes of subsection (1) wishes part of each dividend to which the declaration relates to be taken into account in determining whether the company has made a sufficient distribution for the purposes of Division 7 of Part III in relation to a particular year of income, the company may, as well as specifying a percentage for the purposes of subsection (1), specify a greater percentage (not exceeding 100%) for the purposes of this subsection in relation to that year of income.

160AQF(2)   [Variation or revocation of declaration]  

A declaration made for the purposes of this section cannot be varied or revoked.

160AQF(3)   [Former exempting company's variation or revocation]  

If:

(a) an exempting company makes a declaration under subparagraph 160AQF(1)(c)(i) , paragraph 160AQF(1)(d) , subparagraph 160AQF(1AAA)(c)(i) or paragraph 160AQF(1AAA)(d) in relation to a dividend or dividends; and

(b) the company becomes a former exempting company before the reckoning day for the dividend or for at least one of the dividends;

subsection (2) does not prevent the company from varying or revoking the declaration.