Commonwealth Consolidated Acts Commonwealth Consolidated ActsThe following table sets out when a debit arises in the * franking account of an entity because of its status as an * exempting entity or * former exempting entity.
Franking debits arising because of status as an exempting entity or former exempting entity | |||
Item | If: | A debit of: | Arises: |
1 | an entity becomes a * former exempting entity; and the entity has a * franking surplus at the time it becomes a former exempting entity | the amount of the franking surplus | immediately after the entity becomes a former exempting entity |
2 | the * exempting account of a * former exempting entity would, apart from item 7 of the table in section 208 - 115, be in * deficit immediately before the end of an income year | an amount equal to the deficit | immediately before the end of the income year |
3 | an * exempting credit arises in the * exempting account of the entity under item 5, 6 or 9 of the table in section 208 - 115 | an amount equal to the exempting credit | when the exempting credit arises |
4 | a * former exempting entity becomes an * exempting entity; and the entity has an * exempting deficit at the time it becomes an * exempting entity | an amount equal to the exempting deficit | immediately after it becomes an exempting entity |
5 | a * franking credit arises in the * franking account of an entity under item 3 or 4 of the table in section 205 - 15 because a * distribution is made by an * exempting entity to the entity, or a distribution made by an exempting entity * flows indirectly to the entity | an amount equal to the amount of the franking credit | when the franking credit arises |
Note 1: Item 3 of the table is designed to reverse out franking credits that arise in relation to a period during which the entity is an exempting entity. The entity will receive an exempting credit instead.
Note 2: Item 5 of the table is designed to reverse out franking credits that arise under the core rules because an entity receives a franked distribution from an exempting entity. Only a recipient who is itself an exempting entity is entitled to a franking credit in these circumstances.