Taxation Laws Amendment Act (No. 3) 1993 (118 of 1993)

Part 4   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 9   Amendments relating to dividend imputation

Subdivision B   Amendments of the Principal Act

83   What constitutes franking

Section 160AQF of the Principal Act is amended:

(a) by inserting in subparagraph (1)(c)(i) "class A" before "franked";
        

(b) by inserting in paragraph (1)(d) "class A" before "franked";
        

(c) by inserting in subsection (1) "class A" before "franked to the extent";
        

(d) by inserting after subsection (1) the following subsections:
        

"(1AA) If:

(a) a frankable dividend (in this subsection called the 'current dividend') is paid to a shareholder in a company; and

(b) the company is a resident at the time of payment; and

(c) if the current dividend is paid under a resolution:

(i) before the reckoning day for the current dividend, the company makes a declaration that each dividend to which the resolution relates is a class B franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration in relation to the dividend; and

(ii) the percentage so specified is the same for each of the dividends to which the resolution relates; and

(d) if the current dividend is not paid under a resolution-the company makes a declaration before the reckoning day for the current dividend that the current dividend is a class B franked dividend to the extent of a percentage (not exceeding 100%) specified in the declaration;

the current dividend is taken to have been class B franked to the extent of the amount worked out using the formula:

Current dividend x Specified percentage

where:

'Current dividend' means the amount of the current dividend;

'Specified percentage' means the percentage specified in the declaration in relation to the dividend.

"(1AB) Despite subsections (1) and (1AA), a dividend is taken not to have been class A franked or class B franked if the sum of:

(a) the class A franked amount of the dividend; and

(b) the class B franked amount of the dividend;

exceeds the amount of the dividend.".