INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 2A - Exempting companies and former exempting companies  

SECTION 160AQCNI   TRANSITIONAL PROVISIONS FOR CERTAIN EXEMPTING COMPANIES THAT BECOME FORMER EXEMPTING COMPANIES  

160AQCNI(1)   Conversion of franking surplus or deficit not to apply if change in company's status resulted from contract made before particular time.  

Subject to subsection (2), sections 160AQCNG , 160AQCNH , 160AQCNM and 160AQCNN do not apply to an exempting company that became a former exempting company as mentioned in the section concerned as a result of an acquisition of shares in the company under a contract that was entered into before 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

160AQCNI(2)   Exception where contract made for purpose of obtaining franking credits.  

Subsection (1) does not apply if the contract was entered into for a purpose (whether or not the purpose was the dominant purpose but not including an incidental purpose) of obtaining a franking credit benefit within the meaning of subsection 177EA(18) .

160AQCNI(3)   Former exempting company reverts to that status within 12 months after becoming an exempting company.  

If:

(a) a former exempting company becomes an exempting company; and

(b) within a period of less than 12 months afterwards it again becomes a former exempting company;

whichever of the following subsections is applicable has effect.

160AQCNI(4)   Exempting company has franking surplus.  

If, at the time when the company again became a former exempting company, it had a class A franking surplus or a class C franking surplus, the references in paragraphs 160AQCNG(1)(c) or (d) or (2)(c) or (d), as the case may be, to the surplus are taken to be references to only so much of the surplus as would have been the company's class A exempting surplus or class C exempting surplus, as the case may be, if the company had remained a former exempting company throughout that period.

160AQCNI(5)   Exempting company has franking deficit.  

If, at the time when the company again became a former exempting company, it had a class A franking deficit or a class C franking deficit, the references in paragraphs 160AQCNH(1)(c) or (d) or (2)(c) or (d), as the case may be, to the deficit are taken to be references to only so much of the deficit as would have been the company's class A exempting deficit or class C exempting deficit, as the case may be, if the company had remained a former exempting company throughout that period.