Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 5/19)
Character Range: 3763942–3766777

the assessment of the company's *income tax liability for an income year (the previous assessment) is amended; and
 (b) at least one of the following applies:
 (i) a *tax offset under section 205‑70 is applied in making that amended assessment;
 (ii) a tax offset under section 205‑70 was applied in making the previous assessment.
 (4) Section 219‑55 has effect in relation to the company as if:
 (a) if subparagraph (3)(b)(i) of this section applies—a reference in that section to the new ratio were a reference to the revised shareholders' ratio that is based on the amended assessment; and
 (b) if subparagraph (3)(b)(ii) of this section applies—the reference in paragraph (1)(b) of that section to the *shareholders' ratio used previously were a reference to the revised shareholders' ratio that is based on the previous assessment.
Example: Continuing the example in subsection (2), the assessment of X Co for the 2002‑2003 income year is amended on 31 March 2004. Under the amended assessment, X Co's income tax liability would be $300,000 if the tax offset were disregarded.
Of that liability, $60,000 is attributable to the shareholders. That amount is reduced by the tax offset of $68,000 to nil.
X Co's liability to pay income tax is therefore reduced to $240,000 ($300,000 minus $60,000) and it will receive a refund of $92,000 ($332,000 minus $240,000). As the revised shareholders' ratio has become nil, no franking debit arises from the refund.
The franking credits that previously arose from the payments of PAYG instalments and income tax would not have arisen if the new revised shareholders' ratio had been used. Section 219‑55 (as applied by subsection (4) of this section) therefore operates to create an adjustment to cancel those franking credits. The adjustment is a franking debit of $12,000 that arises on the day of the amendment of the assessment.

Division 220—Imputation for NZ resident companies and related companies

Table of Subdivisions
 Guide to Division 220
220‑A Objects of this Division
220‑B NZ company treated as Australian resident for imputation system if company chooses
220‑C Modifications of other Divisions of this Part

Guide to Division 220

220‑1  What this Division is about
      A company resident in New Zealand may choose that the imputation system apply in relation to it. If it does, the rest of this Part applies in relation to it as if it were an Australian resident company, but with modifications. Some of the modifications also affect:

                (a) other companies that are members of the same wholly‑owned group; or
                (b) entities that receive distributions from the company resident in New Zealand.

Subdivision 220‑A—Objects of this Division

Table of sections
220‑15 Objects
220‑20 What is an NZ resident?

220‑15  Objects
 (1) The main objects