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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of private ruling

Authorisation Number: 1011772253854

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Ruling

Subject: Refund of franking credits

Question

Is the deceased estate with a net loss entitled to a refund of franking credits?

Answer

No

Relevant facts

The deceased estate has lodged an income tax return.

The income tax return shows the estate has a net loss.

The estate received franked dividend income with franking credits.

You have applied a private ruling to determine if the franking credits can be refund to the estate or another entity.

Question

Detailed reasoning

Division 67 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with the refunding of excess imputation credits.

Taxpayers eligible for the refund are resident:

    · Individuals;

    · trustees liable to be assessed under section 99 of the Income Tax Assessment Act 1936 (ITAA 1936);

    · superannuation funds;

    · approved deposit funds;

    · life assurance companies (in respect of their superannuation business);

    · registered organisations (in respect of their superannuation business);

    · pooled superannuation trusts, and

    · certain registered charitable and gift deductible organisations.

Subsection 67-25(1B) of the ITAA 1997 makes it clear that trustees entitled to a franking credit under section 160AQY of the ITAA 1936 can only receive a refund of any excess imputation credits if they are liable to be assessed under section 99 of the ITAA 1936.

In this case of a deceased estate with a net loss, the trustee has no liability to be assessed under section 99 of the ITAA 1936 and is not entitled to a refund of excess imputation credits.


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