INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 6 - Tax effects for shareholders  

Subdivision A - Assessable income of certain shareholders  

SECTION 160AQTB   WHERE EXEMPTED DIVIDEND PAID BY FORMER EXEMPTING COMPANY  

160AQTB(1)   Grossed-up amount to be included in assessable income of life assurance company that holds shares.  

Subject to this section, if:


(a) a class A exempted dividend, or a class C exempted dividend, is paid in a year of income to a shareholder in a former exempting company in respect of accountable shares held by the shareholder in the former exempting company; and


(b) at both of the following times:


(i) the time when the dividend was paid;

(ii) the time immediately before the former exempting company ceased to be an exempting company;
the shareholder was a life assurance company;

subsection 160AQT(1A) or (1C) applies as if the dividend were a class A franked dividend or a class C franked dividend and the class A exempted amount or class C exempted amount were a class A franked amount or a class C franked amount, as the case may be.

160AQTB(2)   Grossing-up limited to grossed-up amount attributable to credits arising while life assurance company held shares.  

Subsection (1) does not apply to so much of the exempted amount of an exempted dividend paid by a former exempting company to a life assurance company as related to exempting credits of the former exempting company that arose at a time before the life assurance company acquired the shares in respect of which the dividend was paid.

160AQTB(3)   Grossed-up amount to be included in assessable income of holder of shares under employee share scheme.  

If a class A exempted dividend, or a class C exempted dividend, is paid in a year of income in respect of a share in a former exempting company held by a person who:


(a) was an employee of the former exempting company, or of a company that was a subsidiary of the former exempting company, at the time when the dividend was paid; and


(b) acquired the share under an eligible employee share scheme;

subsection 160AQT(1) or (1AB) applies as if the dividend were a class A franked dividend or a class C franked dividend and the class A exempted amount or class C exempted amount were a class A franked amount or a class C franked amount, as the case may be.

160AQTB(4)   Certain natural persons entitled to franking rebate in respect of exempted dividend.  

If:


(a) a company other than a former exempting company became an exempting company; and


(b) immediately before the company became an exempting company all the accountable shares and accountable interests in the company were beneficially owned (whether directly or indirectly) by natural persons who were residents; and


(c) the company became an exempting company because some or all of the persons mentioned in paragraph (b) became non-residents; and


(d) the company becomes a former exempting company because all of the persons mentioned in paragraph (b) are or have become residents; and


(e) an amount attributable to a class A exempted dividend or a class C exempted dividend paid by the company is included in the assessable income of such a person; and


(f) all the accountable shares and accountable interests in the company were, throughout the period beginning when the company became an exempting company and ending when the amount was received by the person, beneficially owned (directly or indirectly) by persons mentioned in paragraph (b);

subsection 160AQT(1) or (1AB) , or section 160AQX or 160AQZ , apply in relation to the person as if the amount were a class A franked dividend or a class C franked dividend, or a class A flow-on franking amount or a class C flow-on franking amount in relation to the relevant trust amount or partnership amount, and the class A exempted amount or class C exempted amount were a class A franked amount or a class C franked amount, as the case requires.


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