INCOME TAX ASSESSMENT ACT 1997 - SECT 220.605 Effect on exempting account if NZ franking choice ceases to be in force

INCOME TAX ASSESSMENT ACT 1997 - SECT 220.605

  (1)   This section has effect if:

  (a)   a company has made an * NZ franking choice; and

  (b)   the choice is revoked or cancelled at a time (the end time ); and

  (c)   immediately before the end time:

  (i)   the company is a foreign resident; and

  (ii)   the company is a * former exempting entity.

Exempting debit if exempting surplus just before end time

  (2)   An * exempting debit arises in the company's * exempting account at the end time if the account was in * surplus immediately before that time. The amount of the debit equals the * exempting surplus.

If exempting deficit just before end time

  (3)   If the company's * exempting account was in * deficit immediately before the end time:

  (a)   a * franking debit equal to that deficit arises in the company's * franking account immediately before the end time; and

  (b)   an * exempting credit equal to that deficit arises in the company's exempting account at the end time.