Taxation Laws Amendment Act (No. 3) 2003 (101 of 2003)

Schedule 3   Franking of distributions by co-operatives

Income Tax Assessment Act 1936

1   At the end of section 120

Add:

(4) No deduction is allowable under subsection (1) to the extent that the assessable income of a co-operative company is distributed as the franked part of a franked distribution.

(5) For the purposes of this section, in determining whether the assessable income of a co-operative company is distributed as the franked part of a franked distribution, if:

(a) an amount is distributed by the co-operative company as a franked distribution; and

(b) the franking percentage (within the meaning of the Income Tax Assessment Act 1997) for the distribution is less than 100%; and

(c) a part of the distribution is attributable to sources other than the assessable income of the co-operative company;

it is to be assumed that the franked part of the distribution is attributable, to the greatest extent possible, to those other sources.

(6) If a co-operative company distributes assessable income among its shareholders within the period of 3 months (or such longer period as the Commissioner decides) starting at the end of a year of income, the co-operative company may elect that the distribution is to be taken, for the purposes of this section only, to have been made on the last day of the year of income.

(7) In this section:

franked distribution has the same meaning as in the Income Tax Assessment Act 1997.