Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_9:p8
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 8/9)
Character Range: 83274–85835

and
 (b) the amount is attributable to the *franking credit on a *distribution that *flows indirectly to the entity;
then, despite anything in those Divisions, the amount that is included in the assessable income of the entity is equal to the entity's *share of the franking credit on the distribution.

 (2) Where:
 (a) as trustee of a trust, an entity is liable to be assessed on an amount under Division 6 of Part III of the Income Tax Assessment Act 1936; and
 (b) the amount is attributable to the *franking credit on a *distribution that *flows indirectly to the trustee;
then, despite anything in that Division, the amount on which the entity is assessed and liable to pay tax is equal to the entity's *share of the franking credit on the distribution.

207‑50  Tax offset where distribution flows indirectly

 (1) If:
 (a) a *franked distribution *flows indirectly to an entity; and
 (b) the entity is one of the following:
 (i) an individual;
 (ii) a *corporate tax entity;
 (iii) a trustee that is liable to be assessed on a share of the *net income of the trust under section 98, 99 or 99A of the Income Tax Assessment Act 1936;
 (iv) a trustee of an eligible entity within the meaning of Part IX of the Income Tax Assessment Act 1936 (certain superannuation funds, ADFs and PSTs are eligible entities);
the entity is entitled to a *tax offset for the income year in which the distribution is made.

Note: These are the ultimate recipients of the distribution and so the ultimate taxpayers. For this reason, they are given the benefit of having income tax already paid on the profits underlying the distribution acknowledged when they pay income tax.

 (2) The amount of the *tax offset is equal to the entity's *share of the *franking credit on the distribution.

Note: The entity's share of the franking credit, and so the entity's tax offset, may be nil.

207‑55  An entity's share of the franking credit on a franked distribution

 (1) Use the following table to work out an entity's share of the *franking credit on a *franked distribution that *flows indirectly to the entity if:
 (a) the distribution is made to a *partnership of which the entity is a partner; or
 (b) the distribution is made to the trustee of a trust of which the entity is a beneficiary and a share of the *net income of the trust is included in the entity's assessable income under section 97, 98A or 100 of the Income Tax Assessment Act 1936; or
 (c) the distribution is made to the entity as trustee of a trust and the entity is liable to be assessed under section 98,