Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p12
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 12/13)
Character Range: 3680030–3682743

its assessment day
210‑120 Venture capital debits
210‑125 Venture capital debit where CGT limit is exceeded
210‑130 Venture capital surplus and deficit
210‑135 Venture capital deficit tax
210‑140 Effect of a liability to pay venture capital deficit tax on franking deficit tax
210‑145 Effect of a liability to pay venture capital deficit tax on the franking account
210‑150 Deferring venture capital deficit

210‑90  The venture capital sub‑account
 (1) Each PDF has a venture capital sub‑account in its franking account. The sub‑account exists even if the PDF does not elect to become a participating PDF by keeping a record of it.
 (2) To the extent that income tax is reasonably attributable to capital gains from venture capital investments, it generates a venture capital credit in the sub‑account. There are other circumstances in which a venture capital credit arises.
 (3) If a PDF receives a refund of that tax, a venture capital debit will arise for the PDF. There are other circumstances in which a venture capital debit will arise, such as on the payment of a distribution franked with a venture capital credit.

210‑95  Venture capital deficit tax
 (1) Venture capital deficit tax is payable if a PDF's venture capital sub‑account is in deficit at the end of the PDF's income year, or immediately before it ceases to be a PDF.
 (2) A PDF's venture capital sub‑account may be in deficit, even if its franking account is not. This can happen because only income tax on income of a particular kind (capital gains on venture capital investments) gives rise to venture capital credits. This means that when a PDF anticipates a venture capital credit, it is not only anticipating that income tax will be paid, but that income tax on income of that kind will be paid. Although income tax may, in fact, later be paid, it will not necessarily be income of the kind that would give rise to a venture capital credit. This results in franking credits arising even while the venture capital sub‑account remains in deficit.
 (3) The discrepancy between the franking account balance and the venture capital sub‑account balance can also arise because venture capital credits do not necessarily arise at the same time as the relevant franking credits and debits (see item 1 of the table in section 210‑105 and item 2 of the table in section 210‑120).

Operative provisions

210‑100  Venture capital sub‑account
  Each *PDF has a venture capital sub‑account within its *franking account.
Note: The balance in the venture capital sub‑account on 1 July 2002 will be either nil or, if the entity has a venture capital surplus or deficit immediately before 1 July 2002 under the imputation scheme existing at that time, an