Default declaration for second series dividends
	If...	the company is taken to have declared that...	under...
1	the first series dividends were class C franked	each dividend in the second series is a class C franked dividend to the extent of the same percentage as in the original declaration	subsection 160AQF(1AAA)
2	the first series dividends were also franked with a venture capital franked amount	each dividend in the second series is a venture capital dividend to the extent of the same percentage as in the original declaration	section 160ASEL

Note 1: Paragraph (a) means that the 2 series of dividends will have separate reckoning days (see the definition of reckoning day in section 160APA). The reckoning day for the second series dividends will be the day on which the first of the second series dividends is paid. This in turn affects the calculation of the required franking amount for the second series dividends.

Note 2: Paragraph (b) means that the company may make a fresh declaration under section 160AQF in relation to the second series dividends. The company may wish to do this to ensure that the second series dividends are franked to the new required franking amount that will need to be calculated under Division 4. It will also mean that the company may make a fresh declaration under section 160ASEL.

160AUF Dividends paid under resolution made before 1 July 2001 but with a reckoning day after 1 July 2001

(1) This section deals with the situation in which:

(a) on or after 1 July 2001, a company pays a class C franked dividend or a number of class C franked dividends under a resolution made before 1 July 2001; and

(b) section 160AUE does not apply to the dividend or dividends.

(2) For the purposes of this Part:

(a) despite subsection 160AQF(2), the company may:

(i) vary any declaration it made under section 160AQF or 160ASEL in relation to the dividend or dividends; or

(ii) revoke any declaration it made under section 160AQF or 160ASEL in relation to the dividend or dividends and make a fresh declaration under that section in relation to the dividend or dividends;

before the reckoning day for the dividend or dividends; and

(b) a declaration varied, or a fresh declaration made, under this section cannot itself be varied or revoked.

160AUG Modifying the operation of subsection 160AQE(3)

When this section applies

(1) This section deals with the situation in which:

(a) subsection 160AQE(3) is applied to work out the provisional required franking amount for a dividend (the current dividend) paid on or after 1 July 2001; and

(b) the earlier franked dividend referred to in that subsection was paid before 1 July 2001.

Effect on required franking amount

(2) The component EFA in the formula in subsection 160AQE(3) is worked out using the following formula:

where:

class C franked amount is the amount that is the class C franked amount of the earlier dividend.

11 Application

(1) The amendment made by item 1 of this Schedule applies to:

(a) franking deficit tax for franking years ending on or after 1 July 2001; and

(b) deficit deferral tax in relation to PAYG instalments paid during a franking year ending on or after 1 July 2001.

(2) The amendment made by item 2 of this Schedule applies to:

(a) the payment of a class C franked dividend to a shareholder of a company on or after 1 July 2001; and

(b) a trust amount or partnership amount that relates, directly or indirectly, to payment of a class C franked dividend to a shareholder in a company on or after 1 July 2001.

(3) The amendment made by item 4 of this Schedule applies to dividends paid on or after 1 July 2001.

(4) The amendment made by item 5 of this Schedule applies to deficit deferral tax in relation to PAYG instalments paid during a franking year ending on or after 1 July 2001.

Schedule 2—Friendly societies

Income Tax Assessment Act 1997

1 Subparagraph 320-35(1)(f)(ii)

Repeal the subparagraph, substitute:

(ia) amounts received on or after 1 July 2001 but before 1 July 2002 that are attributable to ^*income bonds, ^*funeral policies or ^*scholarship plans; and

(ii) amounts received on or after 1 July 2002 that are attributable to income bonds, funeral policies or scholarship plans issued before 1 December 1999.

2 Subsection 320-75(2)

Omit “1 July 2001”, substitute “1 July 2002”.

3 Subsection 320-75(3)

Omit “1 July 2001”, substitute “1 July 2002”.

4 Section 320-110

Omit “1 July 2001”, substitute “1 July 2002”.

Schedule 3—Prescribed dual residents

Income Tax Assessment Act 1936

1 Subsection 46F(3)

Omit “Subsection (2) does not apply”, substitute “Subject to subsection (3A), subsection (2) does not apply”.

2 After subsection 46F(3)

Insert:

(3A) Subsection (3) does not affect the application of subsection (2) to the extent that subsection (2) deals with the payment of the unfranked part of a dividend (whether or not under subparagraph (a)(i) of that subsection):

(a) to a shareholder that is a prescribed dual resident at the time the dividend is paid; or

(b) by a company that is a prescribed dual resident at the time the dividend is paid.

3 After paragraph 46FA(1)(b)

Insert:

(ba) neither the resident company, nor the company that pays the dividend, is a prescribed dual resident; and

4 Application

The amendments made by this Schedule apply to dividends paid on or after 1 July 2000.

Schedule 4—Refundable tax offsets

Part 1—Certain trustees and beneficiaries

Income Tax Assessment Act 1936

1 After subsection 100(1)

Insert:

(1A) If:

(a) a beneficiary in a trust estate is under a legal disability or is deemed to be presently entitled to any of the income of the trust estate by virtue of the operation of subsection 95A(2); and

(b) the beneficiary is not a beneficiary in any other trust estate and does not derive income from any other source; and

(c) the beneficiary would receive a refund of tax offsets under Division 67 of the Income Tax Assessment Act 1997 for a particular year of income if the following amounts were included in the assessable income of the beneficiary for that year:

(i) so much of the individual interest of the beneficiary in the net income of the trust estate for that year as is attributable to a period when the beneficiary was a resident;

(ii) so much of the individual interest of the beneficiary in the net income of the trust estate for that year as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia;

then those amounts are included in the assessable income of the beneficiary for that year.

2 Subsection 100(2)

Omit “such beneficiary”, substitute “a beneficiary to whom subsection (1) or (1A) applies”.

Income Tax Assessment Act 1997

3 Subsection 67-25(1)

Omit “98 or”.

4 Application

(1) The amendments made by items 1 and 2 of this Schedule apply to assessments for years of income that begin on or after 1 July 2000.

(2) The amendment made by item 3 of this Schedule applies to tax offsets that relate to dividends paid on or after 1 July 2000.

Part 2—Non-complying superannuation funds and non-complying ADFs

Income Tax Assessment Act 1997

5 Subsection 67-25(1)

Omit “The tax offset referred to in paragraph (c) is subject to the refundable tax offset rules only if the trustee entitled to the rebate is liable to be assessed under section 99 of the Income Tax Assessment Act 1936.”.

6 After subsection 67-25(1)

Insert:

(1A) The ^*tax offset referred to in paragraph (1)(a) is not subject to the refundable tax offset rules if the shareholder entitled to the rebate is the trustee of a ^*non-complying superannuation fund or a ^*non-complying ADF.

(1B) The ^*tax offset referred to in paragraph (1)(c) is subject to the refundable tax offset rules only if the trustee entitled to the rebate is liable to be assessed under section 99 of the Income Tax Assessment Act 1936.

(1C) The ^*tax offset referred to in paragraph (1)(d) is not subject to the refundable tax offset rules if the taxpayer entitled to the rebate is the trustee of a ^*non-complying superannuation fund or a ^*non-complying ADF.

7 Section 995-1

Insert:

non-complying ADF has the same meaning as in Part IX of the Income Tax Assessment Act 1936.

8 Application

The amendments made by items 5 to 7 of this Schedule apply to assessments for income years ending on or after 22 May 2001.

Schedule 5—Franking rebate on indirect distributions to exempt institutions

Income Tax Assessment Act 1936

1 Subparagraph 160AQX(1)(b)(iii)

Omit “(other than a trustee)”.

2 Application

The amendment made by this Schedule applies to trust amounts that are attributable to dividends paid on or after 1 July 2000.

Schedule 6—Tax rebate for low income aged persons

Income Tax Assessment Act 1936

1 Paragraphs 160AAAA(2)(a) and (b)

Repeal the paragraphs, substitute:

(a) the taxpayer:

(i) is eligible for a pension, allowance or benefit under the Veterans’ Entitlements Act 1986 (other than Part VII); and

(ii) has reached pension age, within the meaning of that Act; and

(iii) is not in gaol; or

(b) the taxpayer:

(i) is qualified for an age pension under the Social Security Act 1991; and

(ii) is not in gaol.

2 Paragraphs 160AAAB(2)(a) and (b)

Repeal the paragraphs, substitute:

(a) the beneficiary:

(i) is eligible for a pension, allowance or benefit under the Veterans’ Entitlements Act 1986 (other than Part VII); and

(ii) has reached pension age, within the meaning of that Act; and

(iii) is not in gaol; or

(b) the beneficiary:

(i) is qualified for an age pension under the Social Security Act 1991; and

(ii) is not in gaol.

3 Application

The amendments made by this Schedule apply to assessments for the 2000-2001 year of income and later years of income.

Schedule 7—Demutualisation of Tower Corporation

Income Tax Assessment Act 1997

1 After section 112-90

Insert:

112-92 Demutualisation of certain entities