INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 208 - Exempting entities and former exempting entities  

SECTION 208-111   Converting former exempting company ' s exempting account balance on 30 June 2002  

208-111(1)  


This section has effect for the purposes of working out the following for a company that was a former exempting company (as defined in former Part IIIAA of the Income Tax Assessment Act 1936 ) at the end of 30 June 2002:


(a) whether the company has an exempting surplus or an exempting deficit for the purposes of the Income Tax Assessment Act 1997 at a time after 30 June 2002;


(b) the company ' s class A exempting account balance (as defined in that Part) at a time after 30 June 2002;


(c) the company ' s class C exempting account balance (as defined in that Part) at a time after 30 June 2002.

Class A exempting surplus at the end of 30 June 2002

208-111(2)  


If the company had a class A exempting surplus (as defined in former Part IIIAA of the Income Tax Assessment Act 1936 ) at the end of 30 June 2002:


(a) a class A exempting debit equal to the surplus is taken to have arisen immediately before the end of 30 June 2002 for the purposes of that Part; and


(b) an exempting credit of the amount worked out using the formula is taken to have arisen at the start of 1 July 2002 in the exempting account that the company has under section 208-110 of the Income Tax Assessment Act 1997 :


Amount of the surplus     × 39
61

Note:

Section 205-5 (with former sections 160APU and 160AQCNM of the Income Tax Assessment Act 1936 ) may affect whether the company had such a surplus at the end of 30 June 2002 and the amount of that surplus, but this section does not (because this section affects the company ' s exempting account balance only after then).

Class C exempting surplus at the end of 30 June 2002

208-111(3)  


If the company had a class C exempting surplus (as defined in former Part IIIAA of the Income Tax Assessment Act 1936 ) at the end of 30 June 2002:


(a) a class C exempting debit equal to the surplus is taken to have arisen immediately before the end of 30 June 2002 for the purposes of that Part; and


(b) an exempting credit of the amount worked out using the formula is taken to have arisen at the start of 1 July 2002 in the exempting account that the company has under section 208-110 of the Income Tax Assessment Act 1997 :


Amount of the surplus     × 30
70

Note:

Section 205-5 (with former sections 160APU and 160AQCNM of the Income Tax Assessment Act 1936 ) may affect whether the company had such a surplus at the end of 30 June 2002 and the amount of that surplus, but this section does not (because this section affects the company ' s exempting account balance only after then).

Class A exempting deficit at end of 30 June 2002

208-111(4)  


If the company had a class A exempting deficit (as defined in former Part IIIAA of the Income Tax Assessment Act 1936 ) at the end of 30 June 2002 and its 2001-02 franking year (as defined in that Part) ended earlier:


(a) a class A exempting credit equal to the deficit is taken to have arisen at the end of 30 June 2002 for the purposes of that Part; and


(b) an exempting debit of the amount worked out using the formula is taken to have arisen at the start of 1 July 2002 in the exempting account that the company has under section 208-110 of the Income Tax Assessment Act 1997 :


Amount of the deficit   × 39
61

Note:

If the company ' s 2001-02 franking year ended at the end of 30 June 2002 and it would have had a class A exempting deficit at that time apart from former section 160AQCNO of the Income Tax Assessment Act 1936 , that section will have eliminated the deficit and either:

  • (a) increased the company ' s liability for franking deficit tax; or
  • (b) reduced the franking credit arising under section 205-10 of this Act in the franking account the company has under the Income Tax Assessment Act 1997 .
  • Class C exempting deficit at end of 30 June 2002

    208-111(5)  


    If the company had a class C exempting deficit (as defined in former Part IIIAA of the Income Tax Assessment Act 1936 ) at the end of 30 June 2002 and its 2001-02 franking year (as defined in that Part) ended earlier:


    (a) a class C exempting credit equal to the deficit is taken to have arisen at the end of 30 June 2002 for the purposes of that Part; and


    (b) an exempting debit of the amount worked out using the formula is taken to have arisen at the start of 1 July 2002 in the exempting account that the company has under section 208-110 of the Income Tax Assessment Act 1997 :


    Amount of the deficit     × 30
    70

    Note:

    If the company ' s 2001-02 franking year ended at the end of 30 June 2002 and it would have had a class C exempting deficit at that time apart from former section 160AQCNO of the Income Tax Assessment Act 1936 , that section will have eliminated the deficit and either:

  • (a) increased the company ' s liability for franking deficit tax; or
  • (b) reduced the franking credit arising under section 205-10 of this Act in the franking account the company has under the Income Tax Assessment Act 1997 .



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