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Ruling
Subject: Restructure and liquidation of the Head Co tax consolidated group
The Commissioner was asked to rule on whether the payment of the franked distribution from Head Co, franked with a franking percentage of 100%, flowing through the trusts and ultimately to Company A, will carry the relevant franking credits under Division 207 of the Income Tax Assessment Act 1997 (ITAA 1997). The Commissioner was also asked whether Company A will be entitled to a tax offset pursuant to section 207-45 of the ITAA 1997.
The Commissioner ruled that, as it can be shown that the distribution flows indirectly to Company A under section 207-50 of the ITAA 1997, Company A will be entitled to a franking tax offset under section 207-45 of the ITAA 1997 and franking credits under section 205-15 of the ITAA 1997, in respect of its share of the dividend and the liquidator's dividend distributed by the trustee of the trust.