Document ID: chunk:federal_register_of_legislation:C2012C00388:clause:4_1:p7
Version: federal_register_of_legislation:C2012C00388
Segment Type: clause
Provision Reference: sch 4 cl 1 (pt 7/10)
Character Range: 26608–29343

tainted again, the account remains tainted until a fresh choice to untaint is made.

 (3) The tainting amount, for a company's *share capital account that is *tainted at a particular time, means the sum of:
 (a) the amount transferred to the company's share capital account that most recently caused the account to become tainted; and
 (b) any other amounts to which this Division applies that have been transferred to the company's share capital account since the transfer referred to in paragraph (a) and before the particular time.

197‑55  Choosing to untaint a tainted share capital account

 (1) A company with a *share capital account that is *tainted may make a choice in the *approved form given to the Commissioner to untaint the account.

 (2) The choice can be made at any time, but cannot be revoked.

Note: The choice has no effect in relation to a subsequent tainting of the share capital account that occurs after the choice is made.

197‑60  Choosing to untaint—liability to untainting tax

Definitions

 (1) For the purpose of this section:
 (a) a company whose *share capital account is *tainted is a company with only lower tax members in relation to the tainting period if, throughout the tainting period, all *members of the company were covered by one, or a combination of 2 or more, of the following subparagraphs:
 (i) other companies;
 (ii) *complying superannuation entities;
 (iii) foreign residents; and
 (b) a company whose share capital account is tainted is a company with higher tax members in relation to the tainting period if it is not a company with only lower tax members in relation to the tainting period.
For this purpose, the tainting period is the period beginning when the share capital account most recently became tainted and ending when the company chooses to untaint the account.

Liability to untainting tax

 (2) A company that chooses to untaint its *share capital account is liable to pay tax, known as untainting tax, equal to the amount calculated in accordance with the formula:
where:

applicable tax amount has the meaning given by subsection (3).

section 197‑45 franking debits means the total *franking debits arising under section 197‑45 because of the transfer of the amounts that made up the *tainting amount at the time of the choice.

section 197‑65 franking debits means the total (if any) *franking debits arising under section 197‑65 because of the choice to untaint.

Note: The payment of untainting tax does not give rise to a franking credit.

 (3) In subsection (2), the applicable tax amount is the amount calculated in accordance with the formula:
where:

applicable tax rate means:
 (a) for a company with only lower tax members in relation to the tainting