Reversing (on tax paid basis) certain franking debits that arose before 1 July 2002
219-45 Reversing (on tax paid basis) certain franking debits that arose before 1 July 2002
This section applies if:
a franking debit arose before 1 July 2002 in the franking account of a life insurance company under former section 160AQCNCE of the Income Tax Assessment Act 1936 in relation to a PAYG instalment variation credit in respect of an income year; and
the company’s assessment day (the assessment day) for that income year occurs on or after 1 July 2002; and
the company has a franking account (the new franking account) under section 205‑10 of the Income Tax Assessment Act 1997.
A franking credit of the amount worked out in accordance with the following formula is taken to have arisen in the new franking account on 1 July 2002:
Start formula Amount of the 1936 Act debit times start fraction 30 over 70 end fraction end formula
where:
amount of the 1936 Act debit means the amount of the franking debit mentioned in paragraph (1)(a).
As the effects of former sections 160AQCNCE and 160APVN of the Income Tax Assessment Act 1936 are not duplicated in the Income Tax Assessment Act 1997, this section ensures that a debit arising under former section 160AQCNCE before 1 July 2002 is reversed on a tax paid basis on that date if it has not been reversed under former section 160APVN before that date.
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