INCOME TAX ASSESSMENT ACT 1997
This section operates if:
(a) the * head company of a * consolidated group is neither an exempting entity nor a * former exempting entity; and
(b) a * corporate tax entity becomes a * subsidiary member of the group at a time (the joining time ); and
(c) the entity is an * exempting entity at the joining time. 709-160(2)
These rules apply to the * consolidated group.
|Rules applying to *consolidated group|
|1||The *head company becomes a *former exempting entity at the joining time|
|2||The *head company has both a *franking account and an *exempting account|
|3||If the *subsidiary member ' s *franking account has a *franking surplus at the joining time:|
|(a)||a debit equal to that surplus arises in that account at the joining time; and|
|(b)||a credit equal to that surplus arises in the *exempting account of the *head company at the joining time|
|4||Subsection 709-60(2) (about franking surplus) does not apply to the *subsidiary member|
|5||Item 1 of the table in section 208-115 does not apply to the *head company|
|6||Item 1 of the table in section 208-120 does not apply to the *head company|
|7||Item 1 of the table in section 208-130 does not apply to the *head company|
|8||Item 1 of the table in section 208-145 does not apply to the *head company|
If the subsidiary ' s franking account is in deficit, it will be liable for franking deficit tax: see subsection 709-60(3) .
The subsidiary ' s franking account does not operate while it is a member of the group: see section 709-65 .