Document ID: chunk:federal_register_of_legislation:C2004A00975:clause:1_1:p20
Version: federal_register_of_legislation:C2004A00975
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 20/20)
Character Range: 50745–53154

Residency requirement for an event giving rise to a franking credit or franking debit
205‑30 Franking debits
205‑35 Refund of income tax
205‑40 Franking surplus and deficit
205‑45 Franking deficit tax
205‑50 Deferring franking deficit

205‑5  The franking account

 (1) Each entity that is, or has ever been, a corporate tax entity has a franking account.

 (2) The payment of a PAYG instalment or income tax will generate a franking credit in that account. The amount of the credit is equal to the amount of tax paid. The receipt of a franked distribution by an entity from another corporate tax entity will also generate a franking credit. There are other circumstances in which a franking credit arises.

 (3) The receipt of a refund of income tax or the payment of a franked distribution by a corporate tax entity will generate a franking debit. There are, however, other cases where a franking debit arises. For example, a franking debit might arise under a determination by the Commissioner because distributions have been streamed.

 (4) An entity must be a franking entity at certain times and satisfy certain residency requirements before a franking credit or debit arises in its account.

 (5) Franking deficit tax is payable if the franking account of an entity is in deficit at the end of the entity's income year, or when the entity ceases to be a franking entity.

[This is the end of the Guide.]

Operative provisions

205‑10  Each entity that is or has been a corporate tax entity has a franking account

  There is a franking account for each entity that is, or has at any time been, a *corporate tax entity.

Note: The balance in the franking account on 1 July 2002 will either be nil or, if the entity had a franking surplus or deficit immediately before 1 July 2002 under the imputation scheme existing at that time, an amount calculated under the Income Tax (Transitional Provisions) Act 1997.

205‑15  Franking credits

  The following table sets out when a credit arises in the *franking account of an entity and the amount of the credit. The credit is called a franking credit.

Credits in the franking account
Item                             If:                                                                                                                        A credit of:                                                                                               Arises: