This TD, released on Wed 16.4.2014, provides that a franking credit arises in the franking account of a head company of a consolidated group when a franked distribution is made by an entity that is not a member of the consolidated group to a trust that is a subsidiary member of the consolidated group. However, the Determination states that this is provided the head company is entitled to a tax offset under Div 207 of the ITAA 1997 because of the franked distribution and satisfies the residency requirement for the income year in which the distribution is made.
The Determination also states that it equally applies to the franking account of a head company of a (MEC) multiple-entry consolidated group.
However, it states that it does not apply where the head company is a life insurance company (as defined in s 995-1(1)), or is treated as if it were a life insurance company by s 713-505, and (a) the head company is a mutual insurance company as defined in s 121AB of the ITAA 1936, or (b) the tax offset under Div 207 to which the head company is entitled because of the franked distribution is subject to the refundable tax offset rules in Div 67.
(The Determination was previously released as Draft TD 2013/D10, and is unchanged from the Draft.)
[LTN 73, 16/4/14]