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INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 205.15

Converting the franking account balance to a tax paid basis--companies whose 2001 - 02 franking year ends before 30 June 2002

  (1)   This section applies to companies whose 2001 - 02 franking year ends before 30   June 2002 under former Part   IIIAA of the Income Tax Assessment Act 1936 (the 1936 Act ).

  (2)   If, but for this subsection, the company would have a franking surplus of a particular class under former Part   IIIAA of the 1936 Act at the end of 30   June 2002 (an original surplus ):

  (a)   a franking debit equal to the surplus is taken to arise for the company under former Part   IIIAA of the 1936 Act at the end of 30   June 2002; and

  (b)   a franking credit arises on 1   July 2002 in the franking account established under section   205 - 10 of the Income Tax Assessment Act 1997 (the 1997 Act ) for the company.

The amount of the franking credit is worked out under subsection   (3).

  (3)   The franking credit generated under paragraph   (2)(b) from an original surplus of a class specified in column 2 of the following table is worked out using the formula in column 3 of the table for that class.

 

Conversion of 1936 Act franking surplus into 1997 Act franking credit

Item

Original surplus

Franking credit generated under paragraph   (2)(b)

1

class A

Start formula Amount of the original class A surplus times start fraction 39 over 61 end fraction end formula

2

class B

Start formula Amount of the original class B surplus times start fraction 33 over 67 end fraction end formula

3

class C

Start formula Amount of the original class C surplus times start fraction 30 over 70 end fraction end formula

  (4)   If, but for this subsection, the company would have a franking deficit of a particular class under former Part   IIIAA of the 1936 Act at the end of 30   June 2002 (an original deficit ):

  (a)   a franking credit equal to the deficit is taken to arise for the company under former Part   IIIAA of the 1936 Act at the end of 30   June 2002; and

  (b)   a franking debit arises on 1   July 2002 in the franking account established under section   205 - 10 of the 1997 Act for the company.

The amount of the franking debit is worked out under subsection   (5).

  (5)   The franking debit generated under paragraph   (4)(b) from an original deficit of a class specified in column 2 of the following table is worked out using the formula in column 3 of the table for that class.

 

Conversion of 1936 Act franking deficit into 1997 Act franking debit

Item

Original deficit

Franking debit generated under paragraph   (4)(b)

1

class A

Start formula Amount of the original class A deficit times start fraction 39 over 61 end fraction end formula

2

class B

Start formula Amount of the original class B deficit times start fraction 33 over 67 end fraction end formula

3

class C

Start formula Amount of the original class C deficit times start fraction 30 over 70 end fraction end formula


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