Document ID: chunk:federal_register_of_legislation:C2025C00029:section:14:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 14 (pt 7/14)
Character Range: 3506260–3509168

trust that is a *complying superannuation entity, when the distribution is made); or
 (b) an entity to whom a franked distribution *flows indirectly.
Note: Subject to the other provisions in this Division, Subdivision 207‑B applies to an entity excluded from the application of this Subdivision because of this subsection.
 (3) This Subdivision applies subject to Subdivisions 207‑C, 207‑D, 207‑E and 207‑F.
Note 1: Subdivision 207‑C sets out the residency requirements that must be satisfied by an individual or a corporate tax entity that receives a franked distribution.
Note 2: Subdivision 207‑D sets out the cases in which the gross‑up and tax offset rules in this Subdivision and Subdivision 207‑B will not apply because the franked distribution (or a share of it) would not have been taxed in any case.
Note 3: Subdivision 207‑E sets out the exceptions to the rules in Subdivision 207‑D.
Note 4: Subdivision 207‑F sets out the cases in which the gross‑up and tax offset rules in this Subdivision and Subdivision 207‑B will not apply because the imputation system has been manipulated in a way that is not permitted under the income tax law.

207‑20  General rule—gross‑up and tax offset
 (1) If an entity makes a *franked distribution to another entity, the assessable income of the receiving entity, for the income year in which the distribution is made, includes the amount of the *franking credit on the distribution. This is in addition to any other amount included in the receiving entity's assessable income in relation to the distribution under any other provision of this Act.
 (2) The receiving entity is entitled to a *tax offset for the income year in which the distribution is made. The tax offset is equal to the *franking credit on the distribution.

Subdivision 207‑B—Franked distribution received through certain partnerships and trustees

Guide to Subdivision 207‑B

207‑25  What this Subdivision is about
      This Subdivision deals with an entity that receives a benefit of a franked distribution where:

                (a) the distribution is made to a partnership or the trustee of a trust; and
                (b) the benefit is received either directly or through other interposed partnerships or trusts.

      The distribution is regarded as flowing indirectly to the entity under this Subdivision.
      On the basis of a notional amount of the entity's share of the distribution, the entity may be entitled to have an amount included in its assessable income and/or a tax offset under this Subdivision.

Table of sections

Gross‑up and tax offset
207‑30 Applying this Subdivision
207‑35 Gross‑up—distribution made to, or flows indirectly through, a partnership or trustee
207‑37 Attributable franked distribution—trusts
207‑45 Tax offset—distribution flows indirectly to an entity

Key concepts
207‑50 When a franked distribution flows indirectly to or through an entity