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INCOME TAX ASSESSMENT ACT 1997 - SECT 220.50

Cancelling an NZ franking choice

  (1)   The Commissioner may cancel a company's * NZ franking choice by written notice given to the company, but only if the Commissioner is satisfied that either:

  (a)   the company was liable to pay * franking deficit tax or * over - franking tax (whether or not because of section   220 - 800 (about joint and several liability for the tax)) and the company did not pay the tax by the day on which it was due and payable; or

  (b)   the company has not complied with subsection   214 - 15(2) or 214 - 20(2) (about giving the Commissioner a * franking return).

  (2)   To avoid doubt, the cancellation takes effect when the notice is given to the company.

Review of cancellation

  (3)   If the company is dissatisfied with the cancellation of the choice, it may object against the cancellation in the manner set out in Part   IVC of the Taxation Administration Act 1953 .

Note:   That Part provides for review of the cancellation objected against.

Effect of cancelling a choice on making another choice in future

  (4)   If the company makes another * NZ franking choice, it does not come into force unless the Commissioner consents in writing to the choice coming into force.

  (5)   In consenting, the Commissioner may specify when the choice is to come into force. The consent has effect according to its terms, despite section   220 - 40.

  (6)   The Commissioner must give a copy of the consent to the company.

Table of sections

Franking NZ franking companies' distributions

220 - 100   Residency requirement for franking

220 - 105   Unfrankable distributions by NZ franking companies

220 - 110   Maximum franking credit under section   202 - 60

NZ franking companies' franking accounts etc.

220 - 205   Franking credit for payment of NZ franking company's withholding tax liability

220 - 210   Effect of franked distribution to NZ franking company or flowing indirectly to NZ franking company

220 - 215   Effect on franking account if NZ franking choice ceases to be in force

Franking accounts of NZ franking company and some of its 100% subsidiaries

220 - 300   NZ franking company's franking account affected by franking accounts of some of its 100% subsidiaries

Effect of NZ franking company making distribution that is non - assessable and non - exempt

220 - 350   Providing for a franking credit to arise

Effects of supplementary dividend from NZ franking company

220 - 400   Gross - up and tax offset for distribution from NZ franking company reduced by supplementary dividend

220 - 405   Franked distribution and supplementary dividend flowing indirectly

220 - 410   Franking credit reduced if tax offset reduced

Rules about exempting entities

220 - 500   Publicly listed post - choice NZ franking company and its 100% subsidiaries are not exempting entities

220 - 505   Post - choice NZ franking company is not automatically prescribed person

220 - 510   Parent company's status as prescribed person sets status of all other members of same wholly - owned group

NZ franking companies' exempting accounts

220 - 605   Effect on exempting account if NZ franking choice ceases to be in force

Tax effect of distribution franked by NZ franking company with an exempting credit

220 - 700   Tax effect of distribution franked by NZ franking company with an exempting credit

Joint and several liability for NZ resident company's unmet franking liabilities

220 - 800   Joint and several liability for NZ resident company's franking tax etc.


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