Document ID: chunk:federal_register_of_legislation:C2025C00029:section:11:p45
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 11 (pt 45/64)
Character Range: 3413469–3416408

at that time.

202‑20  Residency requirement when making a distribution
  An entity satisfies the residency requirement when making a *distribution if:
 (a) in the case of a company—the company is an Australian resident at that time; and
 (b) in the case of a *corporate limited partnership—the corporate limited partnership is an Australian resident at that time; and
 (d) in the case of a *public trading trust—the public trading trust is a resident unit trust for the income year in which that time occurs.

Subdivision 202‑C—Which distributions can be franked?

Guide to Subdivision 202‑C

202‑25  What this Subdivision is about

      Generally, distributions that are made out of realised profits can be franked.
      Those distributions that are not frankable are identified.

Table of sections
202‑30 Frankable distributions

Operative provisions
202‑35 Object
202‑40 Frankable distributions
202‑45 Unfrankable distributions
202‑47 Distributions of certain ADI profits following restructure

202‑30  Frankable distributions
  Distributions and non‑share dividends are frankable unless it is specified that they are unfrankable.

Operative provisions

202‑35  Object
  The object of this Subdivision is to ensure that only distributions equivalent to realised taxed profits can be franked.

202‑40  Frankable distributions
 (1) A *distribution is a frankable distribution, to the extent that it is not unfrankable under section 202‑45.
 (2) A *non‑share dividend is a frankable distribution, to the extent that it is not unfrankable under section 202‑45.

202‑45  Unfrankable distributions
  The following are unfrankable:
 (c) where the purchase price on the buy‑back of a *share by a *company from one of its *members is taken to be a dividend under section 159GZZZP of the Income Tax Assessment Act 1936—so much of that purchase price as exceeds what would be the market value (as normally understood) of the share at the time of the buy‑back if the buy‑back did not take place and were never proposed to take place;
 (d) a *distribution in respect of a *non‑equity share;
 (e) a distribution that is sourced, directly or indirectly, from a company's *share capital account;
 (ea) a distribution or a part of a distribution to which subsection 207‑159(1) of this Act applies (distributions funded by capital raising);
 (f) an amount that is taken to be an unfrankable distribution under section 215‑10 or 215‑15 of this Act;
 (g) an amount that is taken to be a dividend for any purpose under any of the following provisions:
 (i) unless subsection 109RB(6) or 109RC(2) of the Income Tax Assessment Act 1936 applies in relation to the amount—Division 7A of Part III of that Act (distributions to entities connected with a *private company);
 (iii) section 109 of that Act (excessive payments to shareholders, directors and associates);
 (iv) section 47A of that Act (distribution benefits—CFCs);
 (h) an amount that is taken to