78Franking debit to arise for Commonwealth Bank and Development Bank

78 Franking debit to arise for Commonwealth Bank and Development Bank

(1) For the purposes of the Income Tax Assessment Act 1936, a franking debit of a converting body arises on the shareholder creation day of an amount equal to the difference between: (a) the franking surplus of the converting body immediately before the shareholder creation day (calculated without regard to this section); and (b) the amount that would be the franking surplus of the converting body immediately before the shareholder creation day if all amounts paid by the converting body as dividends under this Act on or after 1 July 1987 and before the shareholder creation day were treated as frankable dividends for the purposes of Part IIIAA of the Income Tax Assessment Act 1936. (2) In this section:

converting body means the Commonwealth Bank or the Development Bank.

shareholder creation day means:

(a) for the Commonwealth Bank—the day on which the Commonwealth becomes a shareholder of the Commonwealth Bank; or
(b) for the Development Bank—the day on which the Commonwealth Bank becomes a shareholder of the Development Bank.