Document ID: chunk:federal_register_of_legislation:C2010C00648:clause:10_14:p3
Version: federal_register_of_legislation:C2010C00648
Segment Type: clause
Provision Reference: sch 10 cl 14 (pt 3/4)
Character Range: 210801–213474

amount for that income year that is equal to the lesser of:
 (a) its share amount in relation to the distribution that is mentioned in that subsection; and
 (b) its *share of the *franking credit on the distribution.

Trustee

 (4) If the *franked distribution *flows indirectly to the entity as the trustee of a trust under subsection 207‑50(4), the entity's share amount in relation to the distribution that is mentioned in that subsection is to be reduced by the lesser of:
 (a) that share amount; and
 (b) its *share of the *franking credit on the distribution.

Part of share of distribution manipulated

 (5) If:
 (a) a *franked distribution *flows indirectly to an entity in an income year; and
 (b) the Commissioner has made a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no imputation benefit (within the meaning of that section) is to arise in respect of a specified part of the distribution (the specified part) for the entity;
then, subsection (2), (3) or (4) (as appropriate) applies to the entity on the basis that the amount of its *share of the *franking credit on the distribution is worked out as follows:

 (6) In addition, the following apply to an entity covered by subsection (5):
 (a) if the distribution would otherwise *flow indirectly through the entity—the entity's *share of the distribution for the purposes of this Act (other than subsection (2), (3) or (4)) is to be reduced by the specified part mentioned in subsection (5);
 (b) if the entity would otherwise be entitled to a *tax offset under this Subdivision because of the distribution—the amount of the tax offset is to be worked out as follows:

Example: X is a partner in a partnership to which a franked distribution of $140 is made. The franking credit on the distribution ($60) is included in the assessable income of the partnership under section 207‑35. X's share of the distribution is $70 and its share of the franking credit on the distribution is $30.

 The Commissioner has made a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no imputation benefit (within the meaning of that section) is to arise for X in respect of $42 of the distribution.

 Under subsection (5), X will be allowed a deduction of $18.

 X is the trustee of a trust and the distribution will flow indirectly through X to beneficiaries of the trust. For the purposes of working out a beneficiary's share of the distribution and its share of the franking credit, X's share of the franked distribution is reduced to $28 under this subsection.

What happens if both subsection 207‑95(1) and subsection (1) of this section would