Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 208 - Exempting entities and former exempting entities  

SECTION 208-15   208-15   Distributions by exempting entities and former exempting entities  


To ensure that franking credits accumulated by an exempting entity are not the target of franking credit trading, these rules:


(a) limit the circumstances in which a distribution franked with those credits can give rise to benefits under the imputation system; and


(b) quarantine those credits by moving them into a separate account, called the exempting account, when the entity ceases to be an exempting entity; and


(c) deny a recipient of a distribution franked with a credit from that account any benefit under the imputation system as a result of that distribution, unless the recipient was a member of the entity immediately before it became a former exempting entity.


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