Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 4/6)
Character Range: 6046403–6049238

surplus in its franking account just before the time it became the subsidiary member. The debit equals the surplus, creating a nil balance in the account from that time.

Franking distributions by subsidiary member

709‑80  Subsidiary member's distributions on employee shares and certain preference shares taken to be distributions by the head company
 (1) This section operates if:
 (a) a *subsidiary member of a *consolidated group makes a *frankable distribution; and
 (b) the distribution is made because an entity (the shareholder) owns a *share in the subsidiary member; and
 (c) the share must be disregarded under subsection 703‑35(4) or 703‑37(4); and
 (d) the distribution is made to the shareholder, or to another entity because the shareholder owns the share; and
 (e) the entity to which the distribution is made is not a *member of the group.
Note 1: Subsection 703‑35(4) requires certain shares acquired under employee share schemes to be disregarded.
Note 2: Subsection 703‑37(4) requires certain preference shares to be disregarded following an ADI restructure.
 (2) Part 3‑6 operates as if the *distribution were a *frankable distribution made by the *head company of the group to a *member of the head company.
Note: Part 3‑6 deals with imputation.

709‑85  Non‑share distributions by subsidiary members taken to be distributions by head company
 (1) This section operates if:
 (a) an entity holds a *non‑share equity interest in a *subsidiary member of a *consolidated group; and
 (b) the subsidiary member makes a *non‑share distribution to the entity as holder of the interest; and
 (c) the distribution is a *frankable distribution; and
 (d) the entity to which the distribution is made is not a *member of the group.
 (2) Part 3‑6 operates as if the *distribution were a *frankable distribution made by the *head company of the group to a *member of the head company.
Note: Part 3‑6 deals with imputation.

709‑90  Subsidiary member's distributions to foreign resident taken to be distributions by head company
  Part 3‑6 operates as if a *frankable distribution made by a *subsidiary member of a *consolidated group (the foreign‑held subsidiary) were a frankable distribution made by the *head company of the group to a *member of the head company if:
 (a) the foreign‑held subsidiary meets the set of requirements in section 703‑45, section 701C‑10 of the Income Tax (Transitional Provisions) Act 1997 or section 701C‑15 of that Act; and
 (b) the frankable distribution is made to a foreign resident.
Note: Part 3‑6 deals with imputation.

Payment of group liability by former subsidiary member

709‑95  Payment of group liability by former subsidiary member
 (1) This section operates if:
 (a) an entity (the former subsidiary) ceases to be a *subsidiary member of a *consolidated group (the old group) at a