Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_1:p3
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 3/20)
Character Range: 6590–9441

this Part

201‑1  Objects

 (1) The main object of this Part is to allow certain *corporate tax entities to pass to their *members the benefit of having paid income tax on the profits underlying certain *distributions.

 (2) The other objects of this Part are to ensure that:
 (a) the imputation system is not used to give the benefit of income tax paid by a *corporate tax entity to *members who do not have a sufficient economic interest in the entity; and
 (b) the imputation system is not used to prefer some members over others when passing on the benefits of having paid income tax; and
 (c) the *membership of a corporate tax entity is not manipulated to create either of the outcomes mentioned in paragraphs (a) and (b).

201‑5  Application of this Part

  Subject to the rules on the application of this Part set out in the Income Tax (Transitional Provisions) Act 1997, this Part applies to events that occur on or after 1 July 2002.

Division 202—Franking a distribution

Table of Subdivisions

202‑A Franking a distribution
202‑B Who can frank a distribution?
202‑C Which distributions can be franked?
202‑D Amount of the franking credit on a distribution
202‑E Distribution statements

Subdivision 202‑A—Franking a distribution

Guide to Subdivision 202‑A

202‑1  What this Subdivision is about

      An entity can only frank a distribution if certain conditions are met. These conditions are set out in this Subdivision.

Table of sections

Operative provisions

202‑5 Franking a distribution

[This is the end of the Guide.]

Operative provisions

202‑5  Franking a distribution

  An entity franks a *distribution if:
 (a) the entity is a *franking entity that satisfies the *residency requirement when the distribution is made; and
 (b) the distribution is a *frankable distribution; and
 (c) the entity allocates a *franking credit to the distribution.

Note 1: Division 205 deals with a corporate tax entity's franking account and sets out when credits, known as franking credits, and debits, known as franking debits, arise in that account.

Note 2: The mechanism by which an entity allocates a franking credit to a distribution (for example, whether it is done by resolution or some other means) is determined by the entity.

Subdivision 202‑B—Who can frank a distribution?

Guide to Subdivision 202‑B

202‑10  What this Subdivision is about

      Generally, a corporate tax entity that is resident at the time a distribution is made, can frank the distribution.
      There are some exceptions.

Table of sections

Operative provisions

202‑15 Franking entities
202‑20 Residency requirement when making a distribution

[This is the end of the Guide.]

Operative provisions

202‑15  Franking entities

  An entity is a franking entity at a particular time if:
 (a) it is a *corporate tax entity at that time; and