Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_1:p10
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 10/20)
Character Range: 24872–27583

each of the following is a franking period for the entity in that year:
 (a) the period of 6 months beginning at the start of the entity's income year;
 (b) the remainder of the income year.

 (3) If the entity's income year is a period of 6 months or less, the franking period for the entity in that year is the same as the income year.

 (4) If the entity's income year is a period of more than 6 months and less than 12 months, each of the following is a franking period for the entity in that year:
 (a) the period of 6 months beginning at the start of the entity's income year;
 (b) the remainder of the income year.

 (5) If the entity's income year is a period of more than 12 months, each of the following is a franking period for the entity in that year:
 (a) the period of 6 months beginning at the start of the entity's income year (the first franking period);
 (b) the period of 6 months beginning immediately after the end of the first franking period;
 (c) the remainder of the income year.

203‑45  Franking period—private companies

  The franking period for an entity that is a *private company for an income year is the same as the income year.

203‑50  Consequences of breaching the benchmark rule

 (1) If an entity makes a *frankable distribution in breach of the *benchmark rule:
 (a) the entity is liable to pay over‑franking tax imposed by the New Business Tax System (Over‑franking Tax) Act 2002 if the *franking percentage for the *distribution exceeds the entity's *benchmark franking percentage for the *franking period in which the distribution is made; and
 (b) a *franking debit arises in the entity's *franking account if the franking percentage for the distribution is less than the entity's benchmark franking percentage for the franking period in which the distribution is made.

 (2) Use the following formula to work out:
 (a) in a case dealt with under paragraph (1)(a)—the amount of the *over‑franking tax; and
 (b) in a case dealt with under paragraph (1)(b)—the amount of the *franking debit:
where:

franking % differential is the difference between:
 (a) the *franking percentage for the *frankable distribution; and
 (b) either:
 (i) if subparagraph (ii) does not apply—the entity's *benchmark franking percentage for the *franking period in which the *distribution is made; or
 (ii) if the Commissioner in the exercise of the Commissioner's powers under subsection 203‑55(1), permits the entity to frank the distribution at a different franking percentage—that percentage.

Example: An entity makes 3 successive frankable distributions in a franking period. Each of those distributions is represented in the following diagram. The franking percentage for the first