Deferring franking deficit
205-30 Deferring franking deficit
Object
The object of this section is to ensure that an entity does not avoid franking deficit tax by deferring the time at which a franking debit occurs in its franking account.
End of year deficit deferred
If:
a corporate tax entity receives a refund of income tax within 3 months after 30 June in the year 2003 or a later year; and
the refund is attributable to a period of 12 months ending at the end of 30 June in that year; and
the franking account of the entity would have been in deficit, or in deficit to a greater extent, at the end of 30 June in that year if the refund had been received immediately before that time;
the refund is taken to have been paid to the entity immediately before that time.
Deficit on ceasing to be a franking entity deferred
If an entity ceases to be a franking entity during a period of 12 months ending on 30 June in the year 2003 or a later year, a refund of income tax is taken to have been paid to it immediately before it ceased to be a franking entity, for the purposes of subsection 205‑25(3), if:
the refund is attributable to a period within that 12 months during which the entity was a franking entity; and
the refund is paid within 3 months after the entity ceases to be a franking entity; and
the franking account of the entity would have been in deficit, or in deficit to a greater extent, immediately before it ceased to be a franking entity, if the refund had been received before it ceased to be a franking entity.
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