INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 12A - Venture capital franking  

Subdivision C - Venture capital credits and debits  

SECTION 160ASEH   VENTURE CAPITAL DEBIT - CGT LIMIT FOR YEAR OF INCOME EXCEEDED  

160ASEH(1)   [Debit equal to excess]  

A venture capital debit of a PDF arises on the last day of a year of income if the PDF's net venture capital credits for the year of income exceeds whichever is the lesser of:


(a) the adjusted amount of the PDF's CGT limit for that year of income; and


(b) the adjusted amount of the tax paid by the PDF on its SME income component for that year of income.

The amount of the debit is equal to the excess.

160ASEH(2)   [Net venture capital credits]  

The PDF's net venture capital credits for the year of income is:


Venture capital credits   -   Venture capital debits

where:

venture capital credits
is the total venture capital credits of the PDF that arise under subsection 160ASED(1) and relate to tax in relation to taxable income of that year of income.

venture capital debits
is the total venture capital debits of the PDF that relate to tax in relation to taxable income of that year of income.

Note:

The venture capital credits that are counted for the purposes of this subsection do not include the credit that carries over the surplus in the venture capital sub-account from one franking year to the next. This arises under section 160ASEE and not under subsection 160ASED(1) .

160ASEH(3)   [Calculation of CGT limit]  

The PDF's CGT limit for the year of income is worked out using the formula:


Ordinary capital gains from
  venture capital CGT events  
Ordinary capital gains from
all SME CGT events    
× Section 124ZZB SME
  assessable income
×   SME tax rate

where:

ordinary capital gains from all SME CGT events
means the total of the ordinary capital gains for the year of income for CGT events in relation to SME investments of the PDF.

ordinary capital gains from venture capital CGT events
means the total of ordinary capital gains for the year of income for CGT events in relation to shares in companies that are qualifying SME investments.

SME tax rate
is the tax rate applicable to the SME income component of the PDF for the year of income.

Note:

Section 124ZZB SME assessable income is defined in section 160APA .

160ASEH(4)   [Tax paid]  

The tax paid by the PDF on its SME income component for the year of income is the tax paid by the PDF on its SME income component after allowing tax offsets referred to in section 4-10 of the Income Tax Assessment Act 1997.

160ASEH(5)   [Interpretation]  

In this section:

ordinary capital gain
has the meaning given by section 124ZW .

SME income component
has the same meaning as in section 124ZU .

SME investment
has the meaning given by section 124ZW .


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