INCOME TAX ASSESSMENT ACT 1997
There is no change to the status of the * head company of a * consolidated group if:
(a) the head company is an * exempting entity; and
(b) a * corporate tax entity becomes a * subsidiary member of the group at a time (also the joining time ); and
(c) the entity is an exempting entity at the joining time.
If the subsidiary ' s franking account is in surplus, that surplus will be transferred to the head company ' s franking account: see subsection 709-60(2) .
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 .