Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_9:p2
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 2/9)
Character Range: 68644–71190

is liable to pay franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if its *franking account is in *deficit at the end of an income year.

Corporate tax entity ceases to be a franking entity

 (3) An entity is liable to pay *franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if:
 (a) it ceases to be a *franking entity; and
 (b) immediately before it ceases to be a franking entity, its *franking account is in *deficit.

Note: The tax is imposed in the New Business Tax System (Franking Deficit Tax) Act 2002 and the amount of the tax is set out in that Act.

205‑50  Deferring franking deficit

Object

 (1) The object of this section is to ensure that an entity does not avoid *franking deficit tax by deferring the time at which a *franking debit occurs in its *franking account.

End of year deficit deferred

 (2) A *refund of income tax for an income year is taken to have been paid to an entity immediately before the end of that year, for the purposes of subsection 205‑45(2), if:
 (a) the refund is paid within 3 months after the end of that year; and
 (b) the *franking account of the entity would have been in *deficit, or in deficit to a greater extent, at the end of that year if the refund had been received in that year.

Deficit on ceasing to be a franking entity deferred

 (3) If an entity ceases to be a *franking entity during an income year, a *refund of income tax is taken to have been paid to it immediately before it ceased to be a franking entity, for the purposes of subsection 205‑45(3), if:
 (a) the refund is attributable to a period in the year during which the entity was a franking entity; and
 (b) the refund is paid within 3 months after the entity ceases to be a franking entity; and
 (c) the *franking account of the entity would have been in *deficit, or in deficit to a greater extent, immediately before it ceased to be a franking entity if the refund had been received before it ceased to be a franking entity.

Division 207—Effect of receiving a franked distribution

Table of Subdivisions

 Guide to Division 207
207‑A Effect of receiving a franked distribution generally
207‑B Effect of receiving a franked distribution through certain partnerships and trusts
207‑C Residency requirements for the general rule
207‑D Adjustments where the ultimate recipient of a distribution is not a resident
207‑E No gross‑up or tax offset where distribution is not taxed in any case
207‑F No gross‑up or tax offset where the