INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)
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Hide history noteIf a company with higher tax shareholders elects to untaint its share capital account under section 160ARDW , the company is liable to pay tax equal to the difference between:
(a) the tax payable by top marginal rate shareholders (see subsection (2)); and
(b) the notional franking amount (see subsection (3)). 160ARDY(2) [Calculation of tax]
In subsection (1), the tax payable by top marginal rate shareholders is the amount calculated in accordance with the formula:
where:
top marginal rate
is the maximum rate specified in column 2 of the table in
Part I of Schedule 7
to the
Income Tax Rates Act 1986
that applies for the year of income in which the election is made.
top medicare levy rate
is 2.5%.
In subsections (1) and (2), the notional franking amount is the amount calculated in accordance with the formula:
where:
total class A franking debits
is the sum of:
(a) the amount of the class A franking debit (if any) that arose under section 160ARDV when the share capital account most recently became tainted; and
(b) if the company subsequently transferred one or more further amounts to its share capital account from any of its other accounts - the amounts of any class A franking debits that arose under section 160ARDV when that further amount or those further amounts were transferred; and
(c) the amount of the class A franking debit (if any) specified in the election, that arose under subsection 160ARDX(2) when the election was made.
total class C franking debits
is the sum of:
(a) the amount of the class C franking debit (if any) that arose under section 160ARDV when the share capital account most recently became tainted; and
(b) if the company subsequently transferred one or more further amounts to its share capital account from any of its other accounts - the amounts of any class C franking debits that arose under section 160ARDV when that further amount or those further amounts were transferred; and
(c) the amount of the class C franking debit (if any) specified in the election, that arose under subsection 160ARDX(2) when the election was made.
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