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INCOME TAX ASSESSMENT ACT 1997 - SECT 215.20 Working out the available frankable profits

INCOME TAX ASSESSMENT ACT 1997 - SECT 215.20

Working out the available frankable profits

  (1)   Use the following formula to work out the amount of a * corporate tax entity's available frankable profits at a particular time:

Start formula Maximum frankable amount minus open bracket Committed share dividends plus Undebited non-share dividends close bracket end formula

where:

"committed share dividends" means the sum of:

  (a)   the amounts of any * distributions that are not * non - share dividends and are paid by the entity at that time; and

  (b)   if the entity has announced that it will pay distributions that are not non - share dividends at a later time, or is committed or has resolved (formally or informally) to paying such distributions at a later time--the amounts of those distributions.

"maximum frankable amount" means the maximum amount of * frankable * distributions (other than * non - share dividends) that the * corporate tax entity could pay at that time having regard to its available profits at that time.

"undebited non-share dividends" means the sum of the amounts of the franked parts of the * non - share dividends (worked out under subsection   (2)) that:

  (a)   were not debited to available profits; and

  (b)   were paid within the preceding 2 income years or were paid under the same * scheme under which the entity pays the non - share dividend.

  (2)   The amount of the franked part of a * non - share dividend is worked out using the following formula:

Start formula *Franking credit on the dividend times Applicable gross-up rate end formula

where:

"applicable gross-up rate" means the * corporate tax gross - up rate of the entity making the distribution for the income year in which the distribution is made.

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