INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 207 - Effect of receiving a franked distribution  

Subdivision 207-D - No gross-up or tax offset where distribution would not be taxed  

Operative provisions

SECTION 207-90   Distribution that is made to an entity  

Whole of distribution not assessable

207-90(1)  
If:


(a) a *franked distribution is made to an entity; and


(b) the distribution does not *flow indirectly through the entity to another entity; and


(c) the distribution is *exempt income or *non-assessable non-exempt income in the hands of the entity;

then, for the purposes of this Act:


(d) the amount of the *franking credit on the distribution is not included in the assessable income of the entity under section 207-20 ; and


(e) the entity is not entitled to a *tax offset under this Division because of the distribution.

Part of distribution not assessable

207-90(2)  
If:


(a) a *franked distribution is made to an entity; and


(b) the distribution does not *flow indirectly through the entity to another entity; and


(c) a part of the distribution (the relevant part ) is *exempt income or *non-assessable non-exempt income in the hands of the entity;

then, for the purposes of this Act:


(d) the amount of the distribution is taken to have been reduced by the relevant part; and


(e) the amount of the *franking credit on the distribution is to be worked out as follows:


*Franked distribution
apart from this section - Relevant part
*Franked distribution
apart from this section
× *Franking credit
on the *franked distribution
apart from this section


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