Document ID: chunk:federal_register_of_legislation:C2010C00648:clause:10_14:p1
Version: federal_register_of_legislation:C2010C00648
Segment Type: clause
Provision Reference: sch 10 cl 14 (pt 1/4)
Character Range: 205809–208520

14  Sections 207‑145 and 207‑150
Repeal the sections, substitute:

207‑145  Distribution that is made to an entity

Whole of distribution manipulated

 (1) If a *franked distribution is made to an entity in one or more of the following circumstances:
 (a) the entity is not a qualified person in relation to the distribution for the purposes of Division 1A of Part IIIAA of the Income Tax Assessment Act 1936;
 (b) the Commissioner has made a determination under paragraph 177EA(5)(b) of that Act that no imputation benefit (within the meaning of that section) is to arise in respect of the distribution for the entity;
 (c) the Commissioner has made a determination under paragraph 204‑30(3)(c) of this Act that no *imputation benefit is to arise in respect of the distribution for the entity;
 (d) the distribution is made as part of a *dividend stripping operation;
then, for the purposes of this Act:
 (e) the amount of the *franking credit on the distribution is not included in the assessable income of the entity under section 207‑20 or 207‑35; and
 (f) the entity is not entitled to a *tax offset under this Subdivision because of the distribution; and
 (g) if the distribution *flows indirectly through the entity to another entity—subsection 207‑35(3) and section 207‑45 do not apply to that other entity.

Part of share of distribution manipulated

 (2) If:
 (a) a *franked distribution is made to an entity; and
 (b) the Commissioner makes a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no imputation benefit (within the meaning of that section) is to arise in respect of a specified part of the distribution (the specified part) for the entity;
then, for the purposes of this Act:
 (c) the amount of the distribution is taken to have been reduced by the specified part; and
 (d) the amount of the *franking credit on the distribution is to be worked out as follows:

Example: A franked distribution of $70 is made to the trustee of a trust. Apart from this section, the franking credit on the distribution ($30) would be included in the assessable income of the trust under section 207‑35.

 The Commissioner has made a determination under paragraph 177EA(5)(b) of the Income Tax Assessment Act 1936 that no imputation benefit (within the meaning of that section) is to arise for the trustee in respect of $49 of the distribution.

 Under this subsection, the amount included in the assessable income of the trust under section 207‑35 because of the distribution is reduced from $30 to $9.

 If there is a beneficiary of the trust that is presently entitled to the trust's income, the amount of the distribution that flows indirectly to the beneficiary is