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Edited version of private advice
Authorisation Number: 1052018086250
Date of advice: 7 October 2022
Ruling
Subject: Capital management - franking credits / tax offsets
The Commissioner was asked numerous questions about capital management and has ruled on each of the questions.
Question 1
Will the Dividend, to be determined and subsequently declared and paid to a not-for-profit entity, be a dividend for the purposes of subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
The Commissioner has ruled on this question.
Question 2
Will the Dividend constitute a 'frankable distribution' as defined in section 202-40 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
The Commissioner has ruled on this question.
Question 3
Is the not-for-profit entity an 'exempt institution that is eligible for a refund' pursuant to subsection 207-115(2) of the ITAA 1997?
Answer
The Commissioner has ruled on this question.
Question 4
Will the not-for-profit entity be entitled to a refund of tax offsets relating to franking credits attached to the Dividend?
Answer
The Commissioner has ruled on this question.
Question 5
Will the not-for-profit entity be ineligible to be treated as an exempt institution that is eligible for a refund due to the operation of section 207-120, section 207-122 or section 207-124 of the ITAA 1997?
Answer
The Commissioner has ruled on this question.
Question 6
Please confirm that the Commissioner will not make a determination under paragraph 204-30(3)(c) of the ITAA 1997 to deny the whole, or any part, of the imputation benefits to be received by the not-for-profit entity in relation to the Dividend?
Answer
The Commissioner has ruled on this question.
Question 7
Please confirm that the Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by the not-for-profit entity in relation to the Dividend?
Answer
The Commissioner has ruled on this question.
Question 8
Please confirm that the Commissioner will not make a determination under section 177F of the ITAA 1936 to cancel any tax benefit obtained by the not-for-profit entity in respect of receiving the Dividend?
Answer
The Commissioner has ruled on this question.