Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 210 - Venture capital franking  

Subdivision 210-H - Effect of receiving a distribution franked with a venture capital credit  

SECTION 210-160   The significance of a venture capital credit  

210-160(1)    
The venture capital credit on a distribution is only significant in the hands of a relevant venture capital investor (basically a superannuation fund or other entity that deals with superannuation).

210-160(2)    
That investor receives a tax offset. In most cases, this will be equal to the venture capital credit.

210-160(3)    
Under section 124ZM of the Income Tax Assessment Act 1936 , that part of the distribution that is franked with a venture capital credit is also treated as exempt income in the hands of the entity.