Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p20
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 20/34)
Character Range: 3574192–3576924

this section would apply to an entity in relation to a *franked distribution, then:
 (a) subsection (1) of this section applies to the entity; but
 (b) subsection 207‑95(1) does not apply to the entity.

What happens if both subsection 207‑95(5) and subsection (5) of this section would apply
 (8) If, apart from this subsection, both subsection 207‑95(5) and subsection (5) of this section would apply to an entity in relation to a *franked distribution, then:
 (a) apply subsections 207‑95(5) and (6) first; and
 (b) apply subsections (5) and (6) of this section on the basis that:
 (i) the amount of the entity's *share of the *franking credit on the distribution had been reduced under subsection 207‑95(5); and
 (ii) the amount of the entity's *share of the distribution had been reduced under subsection 207‑95(6).

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.

207‑157  Distribution washing
 (1) This section applies to a *franked distribution received by a *member of a *corporate tax entity on a *membership interest (the washed interest) if:
 (a) the washed interest was acquired after the member, or a *connected entity of the member, disposed of a substantially identical membership interest; and
 (b) a corresponding franked distribution is made to the member, or the connected entity, on the substantially identical interest.

Further requirement for connected entities
 (2) However, if the entity that disposed of the substantially identical interest was a *connected entity of the member, this section does not apply to the *franked distribution unless:
 (a) it would be concluded that the disposal took place wholly or partly because there was an expectation that the acquisition would, or would be likely to, take place; or
 (b) it would be concluded that the acquisition took place wholly or partly because there was a belief that the disposal had taken place.

Substantially identical interests
 (3) Without limiting paragraph (1)(a), for the purpose of that paragraph a *membership interest is substantially identical to the washed interest if it is any one or more of the following:
 (a) fungible with, or economically equivalent to, the washed interest;
 (b) a membership interest in the same *corporate tax entity as the washed interest and of a class that is the same as, or not