Document ID: chunk:federal_register_of_legislation:C2004A00901:clause:3_160aqkae:p1
Version: federal_register_of_legislation:C2004A00901
Segment Type: clause
Provision Reference: sch 3 cl 160AQKAE (pt 1/3)
Character Range: 36205–38927

160AQKAE  Transitional—adjustments where franking year ends before 4 May 1999

When section applies

 (1) This section applies if:
 (a) a life assurance company (the subsidiary company) has become liable to pay one or more of the following in relation to a franking year that ends before 4 May 1999:
 (i) class A franking deficit tax for the franking year;
 (ii) class C franking deficit tax for the franking year;
 (iii) class A deficit deferral tax in relation to the refund of one or more instalments paid during the franking year;
 (iv) class C deficit deferral tax in relation to the refund of one or more instalments paid during the franking year; and
 (b) some or all (the available deficit/deferral tax liability) of that franking deficit tax or deficit deferral tax liability has not given rise to an entitlement to an offset under section 160AQK before 4 May 1999; and
 (c) at all times during the period beginning at the start of the franking year and ending on the day on which an original assessment is made in relation to the subsidiary company in relation to the last year of income in which a liability mentioned in paragraph (a) arises:
 (i) the subsidiary company was a wholly‑owned subsidiary (as defined in section 121AP) of another company (the holding company); and
 (ii) both companies were residents of Australia.

Consequences for the subsidiary company under this section

 (2) The subsidiary company is not entitled to an offset under section 160AQK in relation to the available deficit/deferral tax liability.

 (3) If:
 (a) the subsidiary company satisfies in whole or in part (which whole or part is the deficit/deferral tax amount) the available deficit/deferral tax liability; and
 (b) on or after 4 May 1999:
 (i) the Commissioner serves on the subsidiary company a notice of an original company tax assessment for an eligible year of income in which the company was sufficiently resident; or
 (ii) the Commissioner serves on the subsidiary company a notice of an amended company tax assessment for an eligible year of income in which the company was sufficiently resident, being an amendment that increases the company tax of the company;
the Commissioner must determine that the subsidiary company is entitled to an offset in relation to the company tax, or increased company tax, equal to the amount specified in the determination.

 (4) The amount specified in the determination must be the lesser of the following amounts:
 (a) the deficit/deferral tax amount, reduced by any part of it that has been previously applied under this section;
 (b) the amount of the company tax or increased company tax, reduced by any foreign tax credits allowable in respect of tax paid or payable by