Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Income Tax Assessment Act 1936
1 After section 45ZB
Insert:
46AA Sections 46 and 46A do not apply to the franked part of dividends paid after 30 June 2002
(1) Sections 46 and 46A do not apply to the franked part of a dividend paid to a taxpayer after 30 June 2002.
(2) The franked part of a dividend paid after 30 June 2002 is that part of the dividend that is equal to the amount worked out using the following formula:
where:
"corporate tax rate" has the same meaning as in the Income Tax Assessment Act 1997.
"franking credit on the dividend" means the amount of the franking credit on the dividend, worked out under Subdivision 202 - D of the Income Tax Assessment Act 1997 .
46AB Application of sections 46 and 46A to the unfranked part of dividends
(1) Sections 46 and 46A do not apply to the unfranked part of a dividend paid to a taxpayer after 30 June 2003.
(2) This section does not apply in relation to a taxpayer to which section 46AC applies.
46AC Different application for members of certain groups
(1) This section applies to a taxpayer if:
(a) the taxpayer becomes a member of a consolidated group or MEC group on the day (the consolidation day ) the group comes into existence; and
(b) the consolidation day either is before 1 July 2003 or is both:
(i) the first day of the first income year starting after 30 June 2003 of the group's head company (for a consolidated group) or provisional head company (for a MEC group) on the consolidation day; and
(ii) before 1 July 2004; and
(c) the taxpayer was not a member of a consolidated group or MEC group before the consolidation day.
(2) Sections 46 and 46A do not apply to the unfranked part of a dividend paid to the taxpayer on or after the consolidation day.
(3) In this section:
"consolidated group" has the same meaning as in the Income Tax Assessment Act 1997 .
"head company" has the same meaning as in the Income Tax Assessment Act 1997 .
"MEC group" has the same meaning as in the Income Tax Assessment Act 1997 .
"provisional head company" has the same meaning as in the Income Tax Assessment Act 1997 .
46AD The unfranked part of the dividend
For the purposes of sections 46AB and 46AC, the unfranked part of a dividend is that part of the dividend that remains after deducting the franked part of the dividend (worked out under subsection 46AA(2)) from the amount of the dividend.
46AE Who is a qualified person for the purposes of subsections 46(2B) and 46A(5B) after 30 June 2002
(1) This section applies to dividends paid after 30 June 2002.
(2) For the purposes of subsections 46(2B) and 46A(5B), a shareholder is taken to be a qualified person in relation to a dividend for the purposes of Division 1A of Part IIIAA of the Income Tax Assessment Act 1936 , if the person would have been a qualified person in relation to the dividend under that Division if that Division applied to the dividend.
2 Section 46F
Repeal the section, substitute:
46F Rebate not allowable for certain dividends
(1) In this section:
"exempting entity" has the same meaning as in the Income Tax Assessment Act 1997 .
"group company" has the same meaning as in section 160AFE of this Act.
"unfranked part" of a dividend (including a dividend that is unfrankable under the Income Tax Assessment Act 1997 ), means that part of the dividend that is equal to the amount worked out using the following formula:
where:
"corporate tax rate" has the same meaning as in the Income Tax Assessment Act 1997.
"franking credit on the dividend" means the amount of the franking credit on the dividend, worked out under Subdivision 202 - D of the Income Tax Assessment Act 1997 .
(2) Subject to this section, a shareholder is not entitled to, and must not be allowed, a rebate under section 46 or 46A in respect of:
(a) if a dividend was paid to the shareholder by a company other than an exempting entity, or by an exempting entity and item 6 or 7 of the table in section 208 - 130 of the Income Tax Assessment Act 1997 applied in relation to the dividend:
(i) the unfranked part of the dividend; or
(ii) any part of the dividend in respect of which a determination is made under Subdivision 204 - D of the Income Tax Assessment Act 1997 , or under paragraph 177EA(5)(b) of this Act; or
(b) if a dividend was made to the shareholder by an exempting entity and item 6 or 7 of the table in section 208 - 130 of the Income Tax Assessment Act 1997 does not apply to the dividend--any part of the dividend.
(3) Subject to subsection ( 4), subsection ( 2) does not apply if:
(a) the shareholder is a group company in relation to the company paying the dividend in relation to the year of income in which the dividend is paid; or
(b) were the tests in section 160AFE for working out relationships between companies to apply to a particular time rather than in relation to a year of income--the shareholder would have been a group company in relation to the company paying the dividend at all times during the period of 12 months ending on the day on which the dividend was paid.
(4) Subsection ( 3) does not affect the application of subsection ( 2) to the extent that subsection ( 2) deals with the payment of the unfranked part of a dividend (whether or not under subparagraph ( a)(i) of that subsection):
(a) to a shareholder that is a prescribed dual resident at the time the dividend is paid; or
(b) by a company that is a prescribed dual resident at the time the dividend is paid.
3 Application of item 2
The amendment of the Income Tax Assessment Act 1936 made by item 2 of this Schedule applies to dividends paid after 30 June 2002.