Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 215 - Consequences of the debt/equity rules  

Subdivision 215-B - Non-share dividends that are unfrankable to some extent  

SECTION 215-15   Non-share dividends are unfrankable if profits are unavailable  

215-15(1)    
If:

(a) a *corporate tax entity pays a *non-share dividend; and

(b) immediately before the payment, the amount of the *available frankable profits of the entity is nil, or less than nil;

the non-share dividend is unfrankable .

215-15(2)    
If:

(a) a *corporate tax entity pays a *non-share dividend that is not one of a number of non-share dividends paid at the same time; and

(b) immediately before the payment, the amount of the *available frankable profits of the entity, although greater than nil, are less than the amount of the non-share dividend;

the entity is taken to have made a frankable distribution equal to the amount of the available frankable profits. The remainder of the dividend is taken to be an unfrankable distribution.

215-15(3)    
If:

(a) a *corporate tax entity pays a *non-share dividend that is one of a number paid at the same time; and

(b) immediately before the payment, the amount of the *available frankable profits of the entity, although greater than nil are less than the sum of the amounts of the non-share dividends;

the entity is taken to have made a frankable distribution equal to the amount worked out using the formula:

Amount of the *non-share dividend Sum of the amounts of all the non-share dividends

×

*Available frankable profits

The remainder of the dividend is taken to be an unfrankable distribution.