Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p20
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 20/21)
Character Range: 397121–399751

period;
 (iv) the NZ parent company must meet the condition in subsection (4) for the whole of the period.

Conditions relating to the Australian company
 (2) One condition relating to the Australian company is that the company would not have been effectively owned by prescribed persons as described in sections 208‑25 to 208‑45 of the Income Tax Assessment Act 1997 if:
 (a) those sections and sections 220‑505 and 220‑510 of that Act had applied throughout the period; and
 (b) an accountable membership interest or accountable partial interest in the Australian company had, at a time in the period, been held by, or indirectly for the benefit of, a post‑choice NZ franking company if, at that time:
 (i) the interest was held by, or indirectly for the benefit of, a company (the interest holder); and
 (ii) the interest holder was an NZ resident or would have been one had section 220‑20 of the Income Tax Assessment Act 1997, and section 995‑1 of that Act so far as it relates to section 220‑20 of that Act, applied throughout the period.
 (3) The other condition relating to the Australian company is that the company was a 100% subsidiary of a company that:
 (a) was a listed public company; and
 (b) was an NZ resident or would have been one had section 220‑20 of the Income Tax Assessment Act 1997, and section 995‑1 of that Act so far as it relates to section 220‑20 of that Act, applied throughout the period.

Condition relating to the NZ parent company
 (4) The condition relating to the NZ parent company is that it:
 (a) was not a 100% subsidiary of another company that was a member of the same wholly‑owned group; and
 (b) was an NZ resident or would have been one had section 220‑20 of the Income Tax Assessment Act 1997, and section 995‑1 of that Act so far as it relates to section 220‑20 of that Act, applied throughout the period.

Franking credits for the period remain franking credits
 (5) A franking credit arises in the Australian company's franking account immediately after the switch time.
Note: This franking credit will partly or fully offset the franking debit that arises under item 1 of the table in section 208‑145 of the Income Tax Assessment Act 1997 because the Australian company becomes a former exempting entity at the switch time.

Franking credits for the period do not become exempting credits
 (6) An exempting debit arises in the Australian company's exempting account immediately after the switch time.
Note: This exempting debit will partly or fully offset the exempting credit that arises under item 1 of the table in section 208‑115 of the Income Tax Assessment Act 1997 because