Document ID: chunk:federal_register_of_legislation:C2025C00029:section:11:p44
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 11 (pt 44/64)
Character Range: 3410876–3413718

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

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 an Australian 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

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
 (b) it is not a *life insurance company that is a *mutual insurance company at that time; and
 (c) in a case where the entity is a company that is a trustee of a trust—it is not acting in its capacity as trustee of the trust at that time.

202‑20  Residency requirement when making a distribution
  An entity satisfies the residency requirement when making a *distribution if:
 (a) in the case of a company—the company is an Australian resident at that time; and
 (b) in the