INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 205 - Franking accounts  

SECTION 205-10   Converting the franking account balance to a tax paid basis - companies whose 2001-02 franking year ends on 30 June 2002  

205-10(1)  


This section applies to companies whose 2001-02 franking year ends on 30 June 2002 under former Part IIIAA of the Income Tax Assessment Act 1936 (the 1936 Act ).

205-10(2)  


If the company has a franking surplus of a particular class under former Part IIIAA of the 1936 Act at the end of 30 June 2002:


(a) no franking credit arises under former section 160APL of that Act because of the surplus; and


(b) a franking credit arises on 1 July 2002 in the franking account established under section 205-10 of the Income Tax Assessment Act 1997 (the 1997 Act ) for the company.

The amount of the franking credit is worked out under subsection (3).

205-10(3)  
The franking credit generated under paragraph (2)(b) from a franking surplus of a class specified in column 2 of the following table is worked out using the formula in column 3 of the table for that class.


Conversion of 1936 Act franking surplus into 1997 Act franking credit
Item Franking surplus Franking credit generated under paragraph (2)(b)
1 class A franking surplus Amount of the class A franking surplus at
the end of 30 June 2002 under the 1936 Act
×   39
  61
.
2 class B franking surplus Amount of the class B franking surplus at
the end of 30 June 2002 under the 1936 Act
×   33
  67
.
3 class C franking surplus Amount of the class C franking surplus at
the end of 30 June 2002 under the 1936 Act
×   30
  70




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