Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 210 - Venture capital franking  

Subdivision 210-G - Venture capital sub-account  

Operative provisions

SECTION 210-125   Venture capital debit where CGT limit is exceeded  

210-125(1)    
A *venture capital debit arises for a *PDF where the PDF's net venture capital credits for the income year exceed whichever is the lesser of:

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

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

Net venture capital credits

210-125(2)    
The *PDF's net venture capital credits for the income year is:

Venture capital credits   −   Venture capital debits

where:

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

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

CGT limit

210-125(3)    
The *PDF's CGT limit for the income year 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 income year 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 income year 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 income year.

Tax paid by the PDF on its SME income component

210-125(4)    
The tax paid by the PDF on its SME income component for the income year is the tax paid by the *PDF on its *SME income component after allowing *tax offsets referred to in section 4-10 .