Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_9:p7
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 7/9)
Character Range: 80872–83512

in the assessable income of the trust because the distribution is made to the trustee of the trust; or
 (ii) an amount included in the assessable income of the trust because of the distribution and in circumstances where the distribution flows indirectly to the trustee of the trust because of one or more previous applications of this section; or
 (iii) an amount allowed as a deduction from the assessable income of the trust because of the distribution and in circumstances where the distribution flows indirectly to the trustee of the trust because of one or more previous applications of this section.

207‑40  Effect on assessable income where distribution flows indirectly

 (1) Where:
 (a) a *franked distribution is made to a *partnership; and
 (b) the distribution *flows indirectly to a partner in the partnership;
then, for the purpose of working out the net income of the partnership under subsection 90(1) of the Income Tax Assessment Act 1936, the assessable income of the partnership, for the income year in which the distribution is made, includes an amount equal to the *franking credit on the distribution.

 (2) Where:
 (a) a *franked distribution is made to a trustee of a trust; and
 (b) the distribution *flows indirectly to a beneficiary or the trustee of the trust;
then, for the purpose of working out the net income of the trust under subsection 95(1) of the Income Tax Assessment Act 1936, the assessable income of the trustee, for the income year in which the distribution is made, includes an amount equal to the *franking credit on the distribution.

Note 1: An amount included in the assessable income of a partnership under this provision will also affect the assessable income of a partner in the partnership. This is because of Division 5 of Part III of the Income Tax Assessment Act 1936.

Note 2: An amount included in the assessable income of a trustee under this provision will also affect the assessable income of a beneficiary of the trust, or the amount on which the trustee of the trust is assessed and liable to pay tax. This is because of Division 6 of Part III of that Act.

207‑45  Adjustment of the amount included in the assessable income of an entity because of a distribution that flows indirectly

 (1) Where:
 (a) an amount is included in the assessable income of an entity under Division 5 or 6 of Part III of the Income Tax Assessment Act 1936; and
 (b) the amount is attributable to the *franking credit on a *distribution that *flows indirectly to the entity;
then, despite anything in those Divisions, the amount that is included in the assessable income of the entity is equal to