| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052063518129
Date of advice: 28 November 2022
Ruling
Subject: Commissioner's discretion - franking deficit tax
Question
Will the Commissioner exercise discretion under subsection 205-70(6) of the Income Tax Assessment Act 1997 (ITAA 1997) not to apply the Franking Deficit Tax (FDT) offset penalty?
Answer
Yes.
We accept that the events and circumstances that lead to the franking deficit were outside your control and not readily foreseeable. The events are not due to matters you could influence and are not due to improper tax planning, bad management, inadvertent errors, or expansion of business. Accordingly, the Commissioner will exercise his discretion under subsection 205-70(6) not to apply the FDT offset in the year ending 30 June 20XX.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Your agent advised that there was a credit balance in the company franking account.
The company then declared a dividend.
The deficit arose due to the timing of an event which was outside the company's control.
A FDT liability arose in the 20XX income year.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 205-70(6)