Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 17/20)
Character Range: 3729134–3731956

greater than nil at the relevant time if the committed distributions were ignored; and
 (d) it is reasonable to expect that available profits will arise after payment of the non‑share dividend and before payment of the committed distributions; and
 (e) it is reasonable to expect that, having regard to the available profits mentioned in paragraph (d), the amount of the entity's *adjusted available frankable profits immediately after each of the committed distributions is paid will be greater than nil.
The available frankable profits immediately before the entity pays the non‑share dividend is then the smallest of the amounts of the adjusted available frankable profits mentioned in paragraph (e).
 (2) The entity's adjusted available frankable profits immediately after a committed distribution is paid is the amount that would be its *available frankable profits at that time if all committed distributions to be paid after that time, and the *non‑share dividend, were ignored.
 (3) A *franking debit arises for the entity if:
 (a) the entity anticipates*available frankable profits under subsection (1); and
 (b) the available frankable profits of the entity are less than nil:
 (i) immediately after the last of the committed distributions is made; or
 (ii) immediately before the end of the income year following the income year in which the *non‑share dividend is paid;
whichever is earlier.
 (4) The *franking debit is equal to the lesser of:
 (a) the amount by which the *available frankable profits is below nil; and
 (b) the amount of the franked part of the *non‑share dividend (worked out using subsection 215‑20(2)) or, if more than one non‑share dividend is made at the relevant time, the sum of the amounts of the franked parts of those non‑share dividends.
 (5) In working out the entity's *available frankable profits for the purposes of subsection (3) or (4), disregard:
 (a) any *distributions that:
 (i) the entity announces, or becomes committed to or resolves (formally or informally) to pay after the payment of the *non‑share dividend; and
 (ii) have not been paid; and
 (b) any estimate made by the entity under subsection (1) after the non‑share dividend is paid.

Division 216—Cum dividend sales and securities lending arrangements

Table of Subdivisions
216‑A Circumstances where a distribution to a member of a corporate tax entity is treated as having been made to someone else
216‑B Statements to be made where there is a cum dividend sale or securities lending arrangement

Subdivision 216‑A—Circumstances where a distribution to a member of a corporate tax entity is treated as having been made to someone else

Table of sections
216‑1 When a distribution made to a member of a corporate tax entity is treated as having been made to someone else
216‑5 First situation (cum dividend