Income Tax Assessment Act 1936

SCHEDULE 2D - TAX EXEMPT ENTITIES THAT BECOME TAXABLE  

Division 57 - Tax exempt entities that become taxable  

Subdivision 57-M - Imputation  

SECTION 57-120   CANCELLATION OF FRANKING SURPLUS, CREDIT OR DEBIT  

57-120(1)   Cancellation of surplus.  

Subject to subsections (3) and (4), if, immediately before the transition time, the transition taxpayer or a subsidiary (see section 57-125 ) of the transition taxpayer has a franking surplus, then the surplus is reduced to nil at the transition time.

57-120(2)   Cancellation of credit/debit.  

Subject to subsections (3) and (4), if:


(a) at any time after the transition time, there arises a franking credit or a franking debit of the transition taxpayer or of a subsidiary of the transition taxpayer; and


(b) the franking credit or franking debit is to any extent attributable to a period, or to an event taking place, before the transition time;

the franking credit or franking debit is to that extent taken not to have arisen.

57-120(3)   Cases where subsections (1) and (2) do not apply to the transition taxpayer.  

If:


(a) one or more franking debits of the transition taxpayer arise after the transition time; and


(b) any of the debits is to an extent (the amount of which is the pre-transition time component of the debit) attributable to the period, or to an event taking place, before the transition time; and


(c) immediately before the transition time:


(i) there was a franking surplus of the transition taxpayer that was less than the total of the pre-transition time components of all of the debits; or

(ii) there was no franking surplus of the transition taxpayer;

then:


(d) in a case covered by subparagraph (c)(i) - subsection (1) does not apply to the surplus; and


(e) in any case - subsection (2) does not apply to the debits.

57-120(4)   Cases where subsections (1) and (2) do not apply to a subsidiary.  

If:


(a) one or more franking debits of a subsidiary of the transition taxpayer arise after the transition time; and


(b) any of the debits is to an extent (the amount of which is the pre-transition time component of the debit) attributable to the period, or to an event taking place, before the transition time; and


(c) immediately before the transition time:


(i) there was a franking surplus of the subsidiary that was less than the total of the pre-transition time components of all of the debits; or

(ii) there was no franking surplus of the subsidiary;

then:


(d) in a case covered by subparagraph (c)(i) - subsection (1) does not apply to the surplus; and


(e) in any case - subsection (2) does not apply to the debits.

57-120(5)  
(Repealed by No 23 of 2005)


 

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