Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 207.160

  (1)   For the purposes of this Subdivision, a * franked distribution is treated as an interest payment for an entity to whom the distribution * flows indirectly if:

  (a)   all or a part of the entity's individual interest or share amount in relation to the distribution that is mentioned in subsection   207 - 50(2), (3) or (4) could reasonably be regarded as the payment of interest on a loan, having regard to:

  (i)   the way in which that individual interest or share amount was calculated; and

  (ii)   the conditions applying to the payment or application of that individual interest or share amount; and

  (iii)   any other relevant matters; and

  (b)   the entity's interest in the last intermediary entity (see subsection   (2)):

  (i)   was acquired, or was acquired for a period that was extended, at or after 7.30 pm by legal time in the Australian Capital Territory on 13   May 1997; or

  (ii)   was acquired as part of a * financing arrangement for the entity (including an arrangement extending to an earlier arrangement) that was entered into at or after that time.

  (2)   The entity's interest in the last intermediary entity is:

  (a)   if the distribution * flows indirectly to the entity as a partner in a partnership under subsection   207 - 50(2)--the entity's interest in the partnership; or

  (b)   if the distribution flows indirectly to the entity as a beneficiary of a trust under subsection   207 - 50(3)--the entity's interest in the trust; or

  (c)   if the distribution flows indirectly to the entity as the trustee of a trust under subsection   207 - 50(4)--the entity's interest in the trust in respect of which the entity is liable to be assessed.

Table of Subdivisions

  Guide to Division   208

208 - A   What are exempting entities and former exempting entities?

208 - B   Franking with an exempting credit

208 - C   Amount of the exempting credit on a distribution

208 - D   Distribution statements

208 - E   Distributions to be franked with exempting credits to the same extent

208 - F   Exempting accounts and franking accounts of exempting entities and former exempting entities

208 - G   Tax effects of distributions by exempting entities

208 - H   Tax effect of a distribution franked with an exempting credit

Table of sections

208 - 5   What is an exempting entity?

208 - 10   Former exempting entities

208 - 15   Distributions by exempting entities and former exempting entities