59Franking account surpluses reduced to nil

59 Franking account surpluses reduced to nil

(1) Subject to subsection (3), if, immediately before CFM’s sale day, CFM had a class A franking surplus, a class B franking surplus or a class C franking surplus, then CFM’s class A franking surplus, class B franking surplus or class C franking surplus (as the case requires) is reduced to nil at the beginning of CFM’s sale day. (2) Subject to subsection (3), if: (a) at any time on or after CFM’s sale day, there arises a franking credit or a franking debit of CFM; and (b) the franking credit or franking debit is to any extent attributable to a period, or to an event taking place, before CFM’s sale day; the franking credit or franking debit is to that extent taken not to have arisen. (3) If: (a) a class A franking debit, class B franking debit or class C franking debit, that arises on or after CFM’s sale day, of CFM is to an extent (the amount of which is the pre‑sale component of the debit) attributable to a period, or to an event taking place, before the sale day; and (b) immediately before the sale day, CFM had a class A franking surplus, class B franking surplus or class C franking surplus, that was less than the corresponding pre‑sale component of the debit; then subsection (1) does not apply to the surplus and subsection (2) does not apply to the debit. (4) In this section the following expressions have the same meanings as in Part IIIAA of the Income Tax Assessment Act 1936: