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Edited version of private advice
Authorisation Number: 1052082584743
Date of advice: 31 January 2023
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 circumstances 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 commenced on:
1 July 20XX
Relevant facts and circumstances
You lodged your income tax return for the 20XX financial year.
The franking account has a deficit.
You received a foreign resident capital gain withholding amount in June 20XX.
The receipt of this amount has meant you are not eligible for the full tax offset.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 205-70(6)