Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 208 - Exempting entities and former exempting entities  

Subdivision 208-F - Exempting accounts and franking accounts of exempting entities and former exempting entities  

Operative provisions

SECTION 208-185   Minister may convert exempting surplus to franking credit of former exempting entity previously owned by the Commonwealth  

208-185(1)  
The Minister may make a determination or determinations under this section if:


(a) at a particular time, a *corporate tax entity is an *exempting entity; and


(b) at that time all of the *membership interests in the entity are owned by the Commonwealth; and


(c) the Commonwealth has offered for sale or sold, or proposes to offer for sale, some or all of the membership interests; and


(d) the Minister is satisfied, having regard to the matters mentioned in subsection (2), that it is desirable to make a determination or determinations under this section in relation to the entity.

208-185(2)  
The matters to which the Minister must have regard under paragraph (1)(d) are:


(a) whether the making of the determination or determinations is necessary to enable the entity to make *distributions *franked at a *franking percentage of 100% after the sale; and


(b) the extent to which the success of the sale or proposed sale depended or will depend upon the ability of the entity to make *franked distributions; and


(c) the extent to which the reduction in receipts of income tax resulting from the making of the determination or determinations would be offset by the receipt of increased proceeds from the sale; and


(d) any other matters that the Minister thinks relevant.

208-185(3)  
The following provisions of this section apply after the *exempting entity becomes a *former exempting entity.

208-185(4)  
If the *former exempting entity would, apart from this section, have an *exempting surplus at the end of an income year, the Minister may, in writing, determine that:


(a) an *exempting debit of the entity (not exceeding the exempting surplus) specified in the determination is taken to have arisen immediately before the end of that income year; and


(b) a *franking credit of the entity equal to the amount of the exempting debit is taken to have arisen immediately before the end of that income year.

208-185(5)  
A determination under this section may be expressed to be subject to compliance by the *former exempting entity with such conditions as are specified in the determination.

208-185(6)  
If a condition specified in a determination is not complied with, the Minister may revoke the determination and, if the Minister thinks it appropriate, make a further determination under subsection (4).

208-185(7)  
A determination, unless it is revoked, has effect according to its terms.


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