Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_3:p9
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 9/11)
Character Range: 109109–111773

as a partner in a *partnership or a beneficiary of a trust—a deduction from its assessable income; or
 (ii) where the distribution flows indirectly to the entity under subsection 207‑35(4) as trustee of a trust—a reduction of its assessable income;
  of an amount worked out under Subdivision 207‑J;
 (g) the entity is not entitled to a *tax offset under subsection 207‑50(1) as a result of the distribution.

 (2) If the Commissioner makes a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no franking credit benefit (within the meaning of that section) is to arise in respect of a specified part of a *franked distribution in the hands of an entity the following apply:
 (a) the entity is allowed:
 (i) where the distribution flows indirectly to the entity as a partner in a *partnership or a beneficiary of a trust—a deduction from its assessable income; or
 (ii) where the distribution flows indirectly to the entity under subsection 207‑35(4) as trustee of a trust—a reduction of its assessable income;
  of an amount worked out under Subdivision 207‑J;
 (b) any *tax offset to which the entity is entitled under subsection 207‑50(1), is not of the amount mentioned in subsection 207‑50(2), but of an amount worked out using the formula:

207‑155  When is a distribution made as part of a dividend stripping operation?

  A distribution made to a *member of a *corporate tax entity is taken to be made as part of a dividend stripping operation if, and only if, the making of the distribution arose out of, or was made in the course of, a scheme that:
 (a) was by way of, or in the nature of, dividend stripping; or
 (b) had substantially the effect of a scheme by way of, or in the nature of, dividend stripping.

207‑160  Interest payments—distributions that flow indirectly to a beneficiary of a trust

 (1) For the purposes of this Subdivision, a *franked distribution is treated as an interest payment if:
 (a) it *flows indirectly to an entity as beneficiary of a trust; and
 (b) the entity's interest in the trust:
 (i) was acquired, or was acquired for a period that was extended, at or after the commencing time; or
 (ii) was acquired as part of a *financing arrangement for the entity (including an arrangement extending to an earlier arrangement) entered into at or after the commencing time; and
 (c) having regard to the matters in subsection (2), the distribution could reasonably be regarded as equivalent to the payment of interest on a loan.

 (2) A *distribution that *flows indirectly to a beneficiary of a trust can reasonably be regarded as equivalent to the payment of interest on a loan if:
 (a) an