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Reversing (on tax paid basis) certain franking debits that arose before 1 July 2002

             (1)  This section applies if:

                     (a)  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

                     (b)  the company's assessment day (the assessment day ) for that income year occurs on or after 1 July 2002; and

                     (c)  the company has a franking account (the new franking account ) under section 205-10 of the Income Tax Assessment Act 1997 .

             (2)  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:



amount of the 1936 Act debit means the amount of the franking debit mentioned in paragraph (1)(a).

Note:          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.

Table of sections

220-1        Application to things happening on or after 1 April 2003

220-5        Residency requirement for income year including 1 April 2003

220-10      NZ franking company cannot frank before 1 October 2003

220-35      Extended time to make NZ franking choice

220-501    Franking and exempting accounts of new former exempting entities

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