Commonwealth of Australia Consolidated Acts Commonwealth of Australia 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.
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Franking debits arising because of status as an exempting entity or former exempting entity |
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Item |
If: |
A debit of: |
Arises: |
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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 |
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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 |
immediately before the end of the income year |
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3 |
an * exempting credit arises in the *exempting account of the entity under item 5 or 6 of the table in section 208-115 |
an amount equal to the exempting credit |
when the exempting credit arises |
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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 |
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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.