Section 365 — Income Tax Assessment Act 1936: Attribution account payment

(1) Each of the following is an attribution account payment: (a) a dividend paid by a company to a shareholder; (b) the individual interest of a partner in the net income (within the meaning of section 90) of a partnership of a year of income; (c) where a beneficiary of a trust is presently entitled to a share of the income of the trust—that share of the net income (within the meaning of section 95) of the trust of a year of income; (ca) where a beneficiary of a trust is specifically entitled to an amount of a capital gain or a franked distribution of the trust for a year of income: (i) in the case of a capital gain—the amount mentioned in subsection 115-225(1) in respect of the beneficiary; or (ii) in the case of a franked distribution—the amount mentioned in subsection 207-37(1) in respect of the beneficiary; to the extent that it is not covered under paragraph (c); (d) the whole or part of the net income of a trust of a year of income that is assessable to the trustee under section 99 or 99A; (e) an amount of trust property that would be included in the assessable income of a beneficiary of a year of income under section 99B if: (i) the beneficiary were a resident, within the meaning of section 6, at a time during the year of income; and (ii) paragraph 99B(2)(c) were replaced by a paragraph referring to any attribution account payment under paragraph (c) or (d) of this subsection. (2) The attribution account payment is taken to be made: (a) in a paragraph (1)(b) case—by the partnership to the partner; and (b) in a paragraph (1)(c) or (e) case—by the trust to the beneficiary; and (c) in a paragraph (1)(d) case—by the trust to the trustee; and, in any such case, to be made at the end of the year of income. (3) Where: (a) an attribution credit arises for a company in relation to a taxpayer under paragraph 371(1)(b) as a result of a change of residence whereby the company becomes a Part X Australian resident; and (b) the company makes an attribution account payment consisting of a frankable distribution that has been franked in accordance with section 202-5 of the Income Tax Assessment Act 1997, or that has been franked with an exempting credit in accordance with section 208-60 of that Act; and (c) immediately before the attribution account payment is made, there is an attribution surplus for the company in relation to the taxpayer that is attributable to the attribution credit; then, for the purposes of applying section 23AI and Divisions 4 and 5 of this Part in relation to the taxpayer, the attribution account payment is taken to be reduced to the extent that it is franked.