Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 215 - Consequences of the debt/equity rules  

Subdivision 215-B - Non-share dividends that are unfrankable to some extent  

SECTION 215-20   Working out the available frankable profits  

215-20(1)  


Use the following formula to work out the amount of a *corporate tax entity ' s available frankable profits at a particular time:
Graphic

where:

committed share dividends
means the sum of:


(a) the amounts of any *distributions that are not *non-share dividends and are paid by the entity at that time; and


(b) if the entity has announced that it will pay distributions that are not non-share dividends at a later time, or is committed or has resolved (formally or informally) to paying such distributions at a later time - the amounts of those distributions.

maximum frankable amount
means the maximum amount of *frankable *distributions (other than *non-share dividends) that the *corporate tax entity could pay at that time having regard to its available profits at that time.

undebited non-share dividends
means the sum of the amounts of the franked parts of the *non-share dividends (worked out under subsection (2)) that:


(a) were not debited to available profits; and


(b) were paid within the preceding 2 income years or were paid under the same *scheme under which the entity pays the non-share dividend.

215-20(2)  


The amount of the franked part of a *non-share dividend is worked out using the following formula:


*Franking credit on the dividend × Applicable gross-up rate

where:

applicable gross-up rate
means the *corporate tax gross-up rate of the entity making the distribution for the income year in which the distribution is made.


 

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