INCOME TAX ASSESSMENT ACT 1997 - SECT 219.70 Tax offset under section 205 - 70
INCOME TAX ASSESSMENT ACT 1997 - SECT 219.70
Tax offset under section 205 - 70(1) For the purposes of paragraph 205 - 70(1)(c), if a * life insurance company was entitled to a * tax offset under section 205 - 70 for a previous income year, assume section 63 - 10 applied to the part of the company's basic income tax liability for that previous income year that was attributable to its shareholders.
(2) In working out the part of the company's basic income tax liability that was attributable to its shareholders, have regard to the company's accounting records.
Example: The following apply to a life insurance company that satisfies the residency requirement for an income year:
(a) the company has a tax offset of $60,000 under section 205 - 70 (the franking deficit offset) for that year;
(b) the company's basic income tax liability for that year would be $100,000 if the franking deficit offset were disregarded;
(c) 20% of the $100,000 is attributable to the company's shareholders (the shareholders' part).
As a result of applying $20,000 of the franking deficit offset to
reduce the shareholders' part to nil, the company's basic
income tax liability becomes $80,000. The remaining $40,000 of the offset will
be included in a franking deficit tax offset for the next income year for
which the company satisfies the residency requirement.