Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p18
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 18/34)
Character Range: 3569238–3571986

distribution, then:
 (a) apply subsection 207‑90(2) first; and
 (b) apply subsection (2) of this section on the basis that the amount of the *franked distribution had been reduced under subsection 207‑90(2).

207‑150  Distribution that flows indirectly to an entity

Whole of share of distribution manipulated
 (1) If a *franked distribution *flows indirectly to an entity in an income year in one or more of the following circumstances:
 (a) the entity is not a qualified person in relation to the distribution for the purposes of Division 1A of former Part IIIAA of the Income Tax Assessment Act 1936;
 (b) the Commissioner has made a determination under paragraph 177EA(5)(b) of that Act that no imputation benefit (within the meaning of that section) is to arise in respect of the distribution for the entity;
 (c) the Commissioner has made a determination under paragraph 204‑30(3)(c) of this Act that no *imputation benefit is to arise in respect of the distribution for the entity;
 (d) the distribution is treated as an interest payment for the entity under section 207‑160 of this Act;
 (e) the distribution is made as part of a *dividend stripping operation;
 (ea) the distribution is one to which section 207‑157 (which is about distribution washing) applies;
 (eb) the distribution is one to which section 207‑158 (which is about foreign income tax deductions) applies;
then, for the purposes of this Act:
 (f) subsection (2), (3) or (4) (as appropriate) applies to the entity in relation to that income year; and
 (g) the entity is not entitled to a *tax offset under this Division because of the distribution; and
 (h) if the distribution *flows indirectly through the entity to another entity—subsection 207‑35(3) and section 207‑45 do not apply to that other entity.

Partner
 (2) If the *franked distribution *flows indirectly to the entity as a partner in a partnership under subsection 207‑50(2), the entity can deduct an amount for that income year that is equal to its *share of the *franking credit on the distribution.

Beneficiary
 (3) If the *franked distribution *flows indirectly to the entity as a beneficiary of a trust under subsection 207‑50(3), the entity can deduct an amount for that income year that is equal to the lesser of:
 (a) its share amount in relation to the distribution that is mentioned in that subsection; and
 (b) its *share of the *franking credit on the distribution.

Trustee
 (4) If the *franked distribution *flows indirectly to the entity as the trustee of a trust under subsection 207‑50(4), the entity's share amount in relation to the distribution that is mentioned in that subsection is to be reduced by the lesser of:
 (a) that share amount; and
 (b) its *share of the *franking credit on