Income Tax Assessment Act 1997



Division 202 - Franking a distribution  

Subdivision 202-C - Which distributions can be franked?  

Operative provisions

SECTION 202-45  

202-45   Unfrankable distributions  

The following are unfrankable :

(a) (Repealed by No 101 of 2003)

(b) (Repealed by No 53 of 2015)

(c)    where the purchase price on the buy-back of a *share by a *company from one of its *members is taken to be a dividend under section 159GZZZP of the Income Tax Assessment Act 1936 - so much of that purchase price as exceeds what would be the market value (as normally understood) of the share at the time of the buy-back if the buy-back did not take place and were never proposed to take place;

(d)    a *distribution in respect of a *non-equity share;


a distribution that is sourced, directly or indirectly, from a company ' s *share capital account;

(ea)    a distribution or a part of a distribution to which subsection 207-159(1) of this Act applies (distributions funded by capital raising);


an amount that is taken to be an unfrankable distribution under section 215-10 or 215-15 of this Act;


an amount that is taken to be a dividend for any purpose under any of the following provisions:

(i) unless subsection 109RB(6) or 109RC(2) of the Income Tax Assessment Act 1936 applies in relation to the amount - Division 7A of Part III of that Act (distributions to entities connected with a *private company);

(ii) (Repealed by No 79 of 2007 )

(iii) section 109 of that Act (excessive payments to shareholders, directors and associates);

(iv) section 47A of that Act (distribution benefits - CFCs);

(h)    an amount that is taken to be an unfranked dividend for any purpose:

(i) under section 45 of the Income Tax Assessment Act 1936 (streaming bonus shares and unfranked dividends);

(ii) because of a determination of the Commissioner under section 45C of that Act (streaming dividends and capital benefits);

(i)    a *demerger dividend;


a distribution that section 152-125 or 220-105 of this Act says is unfrankable;

(k)    a distribution by a *listed public company that is consideration for the cancellation of a *membership interest in the company as part of a selective reduction of capital, including a selective reduction within the meaning of section 256B of the Corporations Act 2001 .

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