Private ruling: Commissioner's discretion - franking deficit tax
Date of advice: 31 January 2023
Published: 20 March 2023
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: 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? | A1: 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.

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)