Private ruling: Capital management - franking credits / tax offsets
Date of advice: 7 October 2022
Published: 9 January 2023

Ruling: Q1: 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)? | A1: The Commissioner has ruled on this question. | Q2: Will the Dividend constitute a 'frankable distribution' as defined in section 202-40 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: The Commissioner has ruled on this question. | Q3: 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? | A3: The Commissioner has ruled on this question. | Q4: Will the not-for-profit entity be entitled to a refund of tax offsets relating to franking credits attached to the Dividend? | A4: The Commissioner has ruled on this question. | Q5: 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? | A5: The Commissioner has ruled on this question. | Q6: 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? | A6: The Commissioner has ruled on this question. | Q7: 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? | A7: The Commissioner has ruled on this question. | Q8: 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? | A8: The Commissioner has ruled on this question.




Subject: Capital management - franking credits / tax offsets: The Commissioner was asked numerous questions about capital management and has ruled on each of the questions.