Income Tax Assessment Act 1997
An *NZ franking company to which a *franked distribution is made or *flows indirectly is not entitled under Division 207 to a *tax offset for the *distribution. That Division has effect subject to this section. Denial of tax offset does not stop franking credit or debit arising 220-210(2)
However, subsection (1) does not prevent a *franking credit or *franking debit from arising in the *NZ franking company's *franking account under Division 205 or 208 . To avoid doubt, the amount of the credit or debit, and the time at which it arises, are the same as they would be apart from subsection (1).
This has the effect that the amount and timing of the credit or debit are worked out as if the NZ franking company had been entitled to the tax offset that subsection (1) prevents the company from being entitled to.
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