Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:5_4
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 5 cl 4
Character Range: 76558–77920

4                                      The *subsidiary member's *exempting account does not operate during the period:
                                       (a) starting just after the joining time; and
                                       (b) ending when the entity ceases to be a subsidiary member of the group

Note 1: If the subsidiary's franking account is in deficit, it will be liable for franking deficit tax: see subsection 709‑60(3). This deficit may be increased by item 3 in the table in subsection (4).

Note 2: The subsidiary's franking account does not operate while it is a member of the group: see section 709‑65.

 (5) There is no change to the status of the *head company of a *consolidated group if:
 (a) the head company is a *former exempting entity; and
 (b) a *corporate tax entity becomes a *subsidiary member of the group; and
 (c) the entity is neither an *exempting entity nor a former exempting entity at the joining time.

Note 1: If the subsidiary's franking account is in surplus, that surplus will be transferred to the head company's franking account: see subsection 709‑60(2).

Note 2: If the subsidiary's franking account is in deficit, it will be liable for franking deficit tax: see subsection 709‑60(3).

Note 3: The subsidiary's franking account does not operate while it is a member of the group: see section 709‑65.