Ann: Uniti enters into binding Scheme Implementation Deed, page-13

Even if you're on the highest tax rate 45% the franking credits mean the assessable income tax rate reduced by 30% meaning you only pay 15% on the div as tax.

Now let's say this would be capital distribution instead and assume you've held it for over a year and also on the 45% tax rate. Your tax on it would be for half because of the 50% discount rule. Meaning the distribution tax rate is 22.5%.

15% is better then 22.5% and this only gets better the lower your personal tax rate is.

As such it is always better to receive a dividend if it is fully franked then capital returns.