Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 3/19)
Character Range: 3758929–3761675

*franking debit (as appropriate) of the amount worked out under subsection (3) arises in the *franking account.
 (3) The amount is an adjustment that will bring the *franking account to the balance that it would have on the adjustment day if the new ratio had been used to work out all the *franking credits and *franking debits covered by paragraph (1)(b).
Example: On the basis of a shareholders' ratio of 60% for the income year, franking credits of the amounts of $6,000, $6,000, $6,000 and $6,000 arose under item 2 of the table in section 219‑15 for Company X.
 An amended assessment results in a new shareholders' ratio of 70%. Under this section, a franking credit of $4,000 arises on the day of the amended assessment to bring the balance of the franking account from $24,000 to $28,000, which would be the account's balance if the new shareholders' ratio had been used.

219‑70  Tax offset under section 205‑70
 (1) For the purposes of paragraph 205‑70(1)(c), if a *life insurance company was entitled to a *tax offset under section 205‑70 for a previous income year, assume section 63‑10 applied to the part of the company's basic income tax liability for that previous income year that was attributable to its shareholders.
 (2) In working out the part of the company's basic income tax liability that was attributable to its shareholders, have regard to the company's accounting records.
Example: The following apply to a life insurance company that satisfies the residency requirement for an income year:
(a) the company has a tax offset of $60,000 under section 205‑70 (the franking deficit offset) for that year;
(b) the company's basic income tax liability for that year would be $100,000 if the franking deficit offset were disregarded;
(c) 20% of the $100,000 is attributable to the company's shareholders (the shareholders' part).
 As a result of applying $20,000 of the franking deficit offset to reduce the shareholders' part to nil, the company's basic income tax liability becomes $80,000. The remaining $40,000 of the offset will be included in a franking deficit tax offset for the next income year for which the company satisfies the residency requirement.

219‑75  Working out franking credits and franking debits where a tax offset under section 205‑70 is applied

Revised shareholders' ratio—modification of section 219‑50
 (1) Subsection (2) applies to a *life insurance company if a *tax offset under section 205‑70 is applied to work out the company's *income tax liability for an income year.
Note: This means subsection (2) applies if the tax offset is applied to reduce the part of the company's basic income tax liability mentioned in subsection 219‑70(1) in relation to the income year.
 (2) For the purposes