Document ID: chunk:federal_register_of_legislation:C2025C00029:section:14:p13
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 14 (pt 13/14)
Character Range: 3520941–3523577

an entity (the first entity) to another entity if, and only if:
 (a) the other entity is the focal entity in an item of the table in section 207‑55 in relation to the distribution; and
 (b) that focal entity's *share of the distribution is based on the first entity's share of the distribution as an intermediary entity in that or another item of the table.
Example: A franked distribution of $140 is made to a partnership. An amount equal to the franking credit on the distribution ($60) is included in the partnership's assessable income under section 207‑35. Because the partnership has losses of $300 from other sources, it has a partnership loss of $100 for the income year.
 The partnership has 2 equal partners. One partner is the trustee of a trust and the other partner is an individual. The distribution flows indirectly to each partner under subsection (2). Each partner has a share of the partnership loss ($50), a share of the distribution under sections 207‑55 ($70) and a share of the franking credit under section 207‑57 ($30).
 The individual partner is allowed a tax offset of $30 under section 207‑45.
 Because the trust has $100 of income from other sources, it has a net income of $50 for that income year ($100 minus the share of the partnership loss of $50).
 The trust has one individual as a beneficiary, to whom the distribution flows indirectly under subsection (3). The beneficiary's share of the franked distribution is therefore $70 under sections 207‑55 and its share of the franking credit is $30 under section 207‑57. The beneficiary is also allowed a tax offset of $30 under section 207‑45.

207‑55  Share of a franked distribution

Object of section
 (1) The object of this section is to ensure that:
 (a) the amount of a *franked distribution made to a partnership or the trustee of a trust is allocated notionally amongst entities who *derive benefits from that distribution; and
 (b) that allocation corresponds with the way in which those benefits were derived.
Note: An entity can derive a benefit from the distribution (and therefore has a share of the distribution) without actually receiving any of the distribution: see subsection (2) of this section and the example at the end of section 207‑50.
 (2) An entity's share of a *franked distribution is an amount notionally allocated to the entity as its share of the distribution, whether or not the entity actually receives any of that distribution.
 (3) That amount is equal to the entity's share of the distribution as the focal entity in column 3 of an item of the table.
Note: An entity's share of the distribution is based on the share of