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clock Created with Sketch. 09/08/14
07:04
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Originally posted by ainsleym
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At 100% franking which is what CFE stated is the case, the calculation for the franking credit is 4cents x 3/7 = 1.7cents. This is factored into your tax return at end of 2014/15 tax year. So the company does not pay you this, it is factored into your tax return. Mostly I invest in companies with fully franked dividends. Don't forget the 45 day rule which is spelt out by the Tax office, which you can google for info. You must hold your shares for 45 days at least, either side of the dividend date or straddling it, otherwise you are not entitled to the franking credit. This was introduced by the Tax office some years back to discourage dividend strippers who buy just prior to a div then sell the day after it goes ex-div and then move onto the next divvy play ad nauseum
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Possibly the October date was chosen so that those who bought recently can take advantage of the 45 day rule and will not sell their shares for a quick profit.
