Income Tax Assessment Act 1997
This section has effect if:
(a) an *NZ franking company makes a *franked distribution to a company (the receiving company ); and
(b) the distribution does not *flow indirectly through the receiving company to another entity; and
(c) because of section 768-5 , or section 23AI or 23AK of the Income Tax Assessment Act 1936 :
(i) all of the distribution is *exempt income, or is *non-assessable non-exempt income, in the hands of the receiving company; or
(ii) part of the distribution is exempt income, or is non-assessable non-exempt income, in the hands of the receiving company.
A *franking credit arises in the receiving company ' s *franking account on the day on which the distribution is made.
If only part of the distribution is exempt income or non-assessable non-exempt income:
The amount of the *franking credit that so arises is:
(a) if subparagraph (1)(c)(i) applies - the amount of the franking credit on the distribution made by the *NZ franking company; or
(b) if subparagraph (1)(c)(ii) applies - so much of the franking credit on the distribution made by the NZ franking company as is attributable to the part of the distribution referred to in that subparagraph. 220-350(4)
The table in subsection 205-15(1) has effect subject to this section.
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