Thanks for getting back to me with that link. The Bonus Share...

Thanks for getting back to me with that link. The Bonus Share Plan appears to benefit high tax payers as they are not deemed dividends so do not attract tax, though you lose Franking - there are ATO Class Rulings to support this.

A good explanation from the Whitefield scenario is below:

Under Australian Tax Legislation, Shares allotted under the Plan should not be deemed to be a dividend and in most circumstances should not be subject to Australian income tax at the time of allotment. For Australian income tax purposes, Shares issued under the Plan will affect the tax cost and taxable gain or loss on the subsequent disposal of any shares allotted under the Plan and the Participating Shares in relation to which the Shares were allotted.

As Shares allotted under the Plan are not deemed to be a dividend under Australian Tax Legislation, Shares participating in the Plan will not receive any franking credits or LIC Discount Capital Gains attached to the dividend that would otherwise have been received if the Dividend Entitlement was taken in cash or via the Dividend Reinvestment Plan. Accordingly, the Plan is likely to be most suited to Shareholders paying tax at the top marginal individual income tax rate and less suited to those at lower tax rates. Recognising that each Shareholder’s objectives, tax and financial situation are different, Whitefield Industrials strongly recommend that Shareholders carefully and thoroughly consider the tax implications for their own specific situation, prior to participating in the Plan. Shareholders may wish to consult their tax advisers when assessing the Plan. For Australian income tax purposes, the Shares allotted should be taken to have been acquired at the same time the Participating Shares were originally acquired.

Thanks again!