Document ID: chunk:federal_register_of_legislation:C2010C00583:clause:10_1:p7
Version: federal_register_of_legislation:C2010C00583
Segment Type: clause
Provision Reference: sch 10 cl 1 (pt 7/13)
Character Range: 67108–69808

franking company at a time if:
 (a) at the time, the company is an *NZ franking company; and
 (b) the notice constituting the *NZ franking choice that makes the company an NZ franking company at the time was given to the Commissioner at or before the time.

Franking donor company's franking surplus when conditions met

 (3) If the franking donor company's *franking account is in *surplus at the first time all the conditions in subsection (1) are met:
 (a) a *franking debit equal to the surplus arises in the franking donor company's franking account immediately after that time; and
 (b) a *franking credit equal to the surplus arises in the NZ recipient company's franking account immediately after that time.

Franking donor company's franking deficit when conditions met

 (4) If the franking donor company's *franking account is in *deficit at the first time all the conditions in subsection (1) are met, subsection 205‑45(3) applies in relation to the franking donor company as if:
 (a) it ceased to be a *franking entity at that time; and
 (b) its franking account had been in deficit to the same extent immediately before that cessation.

Note: Subsection 205‑45(3) makes an entity liable to pay franking deficit tax if the entity ceases to be a franking entity and had a franking deficit immediately before ceasing to be a franking entity.

NZ recipient company's franking account after conditions are met

 (5) If, apart from paragraph (a), a *franking credit or *franking debit would arise in the franking donor company's *franking account at a time (the accounting time) that is a time when all the conditions in subsection (1) are met but after the first time at which all those conditions are met in relation to the franking donor company:
 (a) the credit or debit does not arise in the franking donor company's franking account; and
 (b) a credit or debit of the same amount arises at the accounting time in the NZ recipient company's franking account instead.

 (6) However, subsection (5) does not apply in relation to:
 (a) a *franking debit arising in the franking donor company's *franking account under subsection (3); or
 (b) a *franking credit arising in that account because of item 5 of the table in section 205‑15 in conjunction with subsection (4) of this section; or
 (c) a franking debit arising in that account under paragraph 220‑605(3)(a).

Note 1: Item 5 of the table in section 205‑15 gives rise to a franking credit immediately after a liability to franking deficit tax arises. Subsection (4) of this section causes such a liability to arise under section 205‑45.

Note 2: Paragraph 220‑605(3)(a) gives rise to a franking debit if the NZ franking choice of a