INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 205 - Franking accounts  

SECTION 205-15   Converting the franking account balance to a tax paid basis - companies whose 2001-02 franking year ends before 30 June 2002  

205-15(1)  


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

205-15(2)  


If, but for this subsection, the company would have a franking surplus of a particular class under former Part IIIAA of the 1936 Act at the end of 30 June 2002 (an original surplus ):


(a) a franking debit equal to the surplus is taken to arise for the company under former Part IIIAA of the 1936 Act at the end of 30 June 2002; 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).

205-15(3)  
The franking credit generated under paragraph (2)(b) from an original 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 Original surplus Franking credit generated under paragraph (2)(b)
1 class A Amount of the original class A surplus × 39
61
.
2 class B Amount of the original class B surplus × 33
67
.
3 class C Amount of the original class C surplus × 30
70

205-15(4)  


If, but for this subsection, the company would have a franking deficit of a particular class under former Part IIIAA of the 1936 Act at the end of 30 June 2002 (an original deficit ):


(a) a franking credit equal to the deficit is taken to arise for the company under former Part IIIAA of the 1936 Act at the end of 30 June 2002; and


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

The amount of the franking debit is worked out under subsection (5).

205-15(5)  
The franking debit generated under paragraph (4)(b) from an original deficit 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 deficit into 1997 Act franking debit
Item Original deficit Franking debit generated under paragraph (4)(b)
1 class A Amount of the original class A deficit × 39
61
.
2 class B Amount of the original class B deficit × 33
67
.
3 class C Amount of the original class C deficit × 30
70




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