TAXATION LAWS AMENDMENT ACT (NO. 3) 2003 NO. 101, 2003 - SCHEDULE 3 - Franking of distributions by co-operatives

Commonwealth Numbered Acts

- Franking of distributions by co-operatives

Income Tax Assessment Act 1936

1 At the end of section 120

Add:

(4): No deduction is allowable under subsection (1) to the extent that the assessable income of a co-operative company is distributed as the franked part of a franked distribution.
(5): For the purposes of this section, in determining whether the assessable income of a co-operative company is distributed as the franked part of a franked distribution, if:

(a): an amount is distributed by the co-operative company as a franked distribution; and
(b): the franking percentage (within the meaning of the Income Tax Assessment Act 1997 ) for the distribution is less than 100%; and
(c): a part of the distribution is attributable to sources other than the assessable income of the co-operative company;

it is to be assumed that the franked part of the distribution is attributable, to the greatest extent possible, to those other sources.

(6): If a co-operative company distributes assessable income among its shareholders within the period of 3 months (or such longer period as the Commissioner decides) starting at the end of a year of income, the co-operative company may elect that the distribution is to be taken, for the purposes of this section only, to have been made on the last day of the year of income.
(7): In this section:

"franked distribution" has the same meaning as in the Income Tax Assessment Act 1997 .

2 At the end of section 200-45

Add:

; and (d) franking by co-operative companies.

3 Paragraph 202-45(a)

Repeal the paragraph.

3A Paragraph 202-45(b)

Omit "that Act", substitute "the Income Tax Assessment Act 1936 ".

4 At the end of Part 3-6

Add:

Division 218—Application of imputation rules to co-operative companies

218-5 Application of imputation rules to co-operative companies

(1): The ^*imputation system applies to a ^*co-operative company in the same way as it applies to any other company but with the modifications set out in this section.
(2): Each reference to a ^*distribution is taken to include a reference to an amount distributed as mentioned in paragraph 120(1)(a) or (b) of the Income Tax Assessment Act 1936 .
(3): Despite subsection 202-75(1) (about giving distribution statements), a ^*co-operative company does not have to give the recipient of a ^*frankable distribution a ^*distribution statement unless the ^*franking percentage for the distribution is greater than zero.

5 Subsection 995-1(1)

Insert:

"co-operative company" has the same meaning as in Division 9 of Part III of the Income Tax Assessment Act 1936 .

6 Application

The amendments made by this Schedule apply to distributions made on or after 1 July 2002.

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