Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 208 - Exempting entities and former exempting entities  

Subdivision 208-F - Exempting accounts and franking accounts of exempting entities and former exempting entities  

Operative provisions

SECTION 208-145  

208-145   Franking debits arising because of status as exempting entity or former exempting entity  

The following table sets out when a debit arises in the *franking account of an entity because of its status as an *exempting entity or *former exempting entity.

Franking debits arising because of status as an exempting entity or former exempting entity
Item	If:	A debit of:	Arises:
1	an entity becomes a *former exempting entity; and the entity has a *franking surplus at the time it becomes a former exempting entity	the amount of the franking surplus	immediately after the entity becomes a former exempting entity
2	the *exempting account of a *former exempting entity would, apart from item 7 of the table in section 208-115, be in *deficit immediately before the end of an income year	an amount equal to the deficit	immediately before the end of the income year
3	an *exempting credit arises in the *exempting account of the entity under item 5, 6 or 9 of the table in section 208-115	an amount equal to the exempting credit	when the exempting credit arises
4	a *former exempting entity becomes an *exempting entity; and the entity has an *exempting deficit at the time it becomes an *exempting entity	an amount equal to the exempting deficit	immediately after it becomes an exempting entity
5	a *franking credit arises in the *franking account of an entity under item 3 or 4 of the table in section 205-15 because a *distribution is made by an *exempting entity to the entity, or a distribution made by an exempting entity *flows indirectly to the entity	an amount equal to the amount of the franking credit	when the franking credit arises

Note 1:

Item 3 of the table is designed to reverse out franking credits that arise in relation to a period during which the entity is an exempting entity. The entity will receive an exempting credit instead.

Note 2:

Item 5 of the table is designed to reverse out franking credits that arise under the core rules because an entity receives a franked distribution from an exempting entity. Only a recipient who is itself an exempting entity is entitled to a franking credit in these circumstances.