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INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 6 - Tax effects for shareholders  

Subdivision A - Assessable income of certain shareholders  

SECTION 160AQT  EXTRA AMOUNT TO BE INCLUDED IN ASSESSABLE INCOME WHERE FRANKED DIVIDEND PAID  

160AQT(1AAA)  [Effect]  


This section has effect subject to section 160AQTA.

160AQT(1)  [Class A franked dividend paid]  


Where:


(a) a class A franked dividend is paid in a year of income to a shareholder in a company; and


(b) the shareholder is:


(i) a natural person who is a resident at the time of payment of the dividend;

(ii) a trustee;

(iii) a partnership; or

(iv) a registered organization; and


(ba) the shareholder is a qualified person in relation to the dividend for the purposes of Division 1A; and


(c) the dividend is not exempt income of the shareholder; and


(d) the dividend was not paid as part of a dividend stripping operation;

the assessable income of the shareholder of the year of income shall include the amount calculated in accordance with the formula:

Graphic


where:

CR is the applicable general company tax rate; and

FA is the class A franked amount of the dividend.

160AQT(1AA)  [Class B franked dividend paid]  


If:


(a) a class B franked dividend is paid in a year of income to a shareholder in a company; and


(b) the shareholder is:


(i) a natural person who is a resident at the time of payment of the dividend; or

(ii) a trustee; or

(iii) a partnership; or

(iv) a registered organization; and


(c) the dividend is not exempt income of the shareholder; and


(d) the dividend was not paid as part of a dividend stripping operation;

the assessable income of the shareholder of the year of income includes the amount worked out using the formula:

Graphic


where:

``Franked amount'' means the class B franked amount of the dividend;

``Company tax rate'' means the applicable general company tax rate.

160AQT(1AB)  [Class C franked dividend paid]  


If:


(a) a class C franked dividend is paid in a year of income to a shareholder in a company; and


(b) the shareholder is:


(i) a natural person who is a resident at the time of payment of the dividend; or

(ii) a trustee; or

(iii) a partnership; or

(iv) a registered organisation; or

(v) an exempt institution whose exempt status is disregarded in relation to the dividend under section 160ARDAB; and


(ba) the shareholder is a qualified person in relation to the dividend for the purposes of Division 1A; and


(c) the dividend is not exempt income of the shareholder; and


(d) the dividend was not paid as part of a dividend stripping operation;

the assessable income of the shareholder of the year of income includes the amount worked out using the formula:

Graphic


where:

Franked amount means the class C franked amount of the dividend.

Company tax rate means the applicable general company tax rate.

160AQT(1A)  [Class A franked dividend paid to life assurance company]  


Where:


(a) a class A franked dividend is paid in a year of income to a shareholder in a company;


(b) the shareholder is a life assurance company;


(ba) the shareholder is a qualified person in relation to the dividend for the purposes of Division 1A; and


(c) the dividend is not exempt income of the shareholder;


(d) the dividend was not paid as part of a dividend stripping operation; and


(e) the assets of the shareholder from which the dividend was derived were included in insurance funds of the shareholder at any time during the period commencing at the beginning of the year of income of the shareholder in which the dividend was paid and ending at the time the dividend was paid;

the assessable income of the shareholder of the year of income shall include the amount calculated in accordance with the formula:

Graphic


where:

CR is the applicable general company tax rate; and

FA is the class A franked amount of the dividend.

160AQT(1B)  [Class B franked dividend paid to life assurance company]  


If:


(a) a class B franked dividend is paid in a year of income to a shareholder in a company; and


(b) the shareholder is a life assurance company; and


(c) the dividend is not exempt income of the shareholder; and


(d) the dividend was not paid as part of a dividend stripping operation; and


(e) the assets of the shareholder from which the dividend was derived were included in insurance funds of the shareholder at any time during the period:


(i) starting at the beginning of the year of income of the shareholder in which the dividend was paid; and

(ii) ending at the time the dividend was paid;

the assessable income of the shareholder of the year of income includes the amount worked out using the formula:

Graphic


where:

``Franked amount'' means the class B franked amount of the dividend;

``Company tax rate'' means the applicable general company tax rate.

160AQT(1C)  [Life assurance company]  


If:


(a) a shareholder in a company is a life assurance company; and


(b) a class C franked dividend is paid by the company to the life assurance company in a year of income; and


(c) the life assurance company is a qualified person in relation to the dividend for the purposes of Division 1A; and


(d) the dividend is not exempt income of the life assurance company; and


(e) the dividend was not paid as part of a dividend stripping operation; and


(f) at any time during the period that:


(i) starts at the beginning of the year of income of the life assurance company in which the dividend was paid; and

(ii) ends at the time when the dividend was paid;
the assets of the life assurance company from which the dividend was derived were both:

(iii) included in the insurance funds of the life assurance company; and

(iv) not held on behalf of the life assurance company's shareholders;

the assessable income of the life assurance company of the year of income includes the amount worked out using the formula:
Franked amount ×    Company tax rate    
1 - Company tax rate

where:

company tax rate means the applicable general company tax rate.

franked amount means the class C franked amount of the dividend.

160AQT(1D)  [When amount not included]  


If a determination is made under paragraph 160AQCBA(3)(b) in respect of the dividend, an amount is not included under this section in the assessable income of a shareholder.

160AQT(1E)  [Paragraph 177EA(5)(b) determination]  


If a determination is made under paragraph 177EA(5)(b) in respect of the whole of the dividend, an amount is not included under this section in the assessable income of a shareholder.

160AQT(1F)  [Proportional reduction]  


If a determination is made under paragraph 177EA(5)(b) in respect of a part of the dividend, the amount that would otherwise be included under this section in the assessable income of a shareholder is reduced by the same proportion as that part of the dividend bears to the whole of the dividend.

160AQT(2)  [Amount included additional]  


An amount included in the assessable income of a shareholder under this section in relation to a dividend is in addition to any other amount included in that assessable income in relation to the dividend under any other provision of this Act.

160AQT(3)  [Amount not attributable to franked dividend]  


For the purposes of this Act, an amount shall not be taken to be directly or indirectly attributable to, or to be in respect of, a franked dividend only because it is directly or indirectly attributable to, or is in respect of, an amount included in assessable income under this section.

160AQT(4)  [Matters to be disregarded]  


In determining for the purposes of this section whether a dividend is exempt income, disregard:


(a) sections 282B, 283 and 297B of this Act; and


(b) paragraphs 320-37(1)(a) and (d) of the Income Tax Assessment Act 1997.

160AQT(4A)  [When exempt status disregarded]  


Disregard section 50-1 of the Income Tax Assessment Act 1997 in determining, for the purposes of this section, whether a dividend is exempt income of an exempt institution whose exempt status is disregarded in relation to the dividend under section 160ARDAB.

160AQT(5)  [Non-exempt dividends]  


For the purposes of this section, if:


(a) because of subsection 124ZM(3), subsection 124ZM(2) does not exempt the franked amount of a dividend paid by a company to a shareholder; and


(b) the dividend is not otherwise exempt income of the shareholder;

the dividend is taken not to be exempt income of the shareholder.

160AQT(6)  [When dividend not exempt income of shareholder]  


For the purposes of this section, if:


(a) because of subsection 124ZM(3), an amount of a dividend paid to a shareholder by a company is not exempt income of the shareholder under paragraph 124ZM(1C)(b) or 124ZM(1D)(b); and


(b) the dividend is not otherwise exempt income of the shareholder;

then:


(c) the dividend is taken not to be exempt income of the shareholder; and


(d) subsections (1AB) and (1C) apply to the dividend as if references to the franked amount of the dividend in those subsections were references to the remaining franked amount as defined in section 124ZM.


 



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