Death and Taxes, page-2

I do not pretend to be any sort of expert on tax. However my thought is that:
#1 - The LICs like to keep a bank of franking credits on hand to ensure that LIC divs are 100% franked even though the portfolio may not always deliver full franking in its own right.
#2 - Well, if the tax rate was lowered, I guess either there will be special divs or they will increase profit reserves (or both). Depends on what the Board thinks is appropriate and best for the longer term. If tax rises, obviously would eat into profits and therefore divs, but again depending on individual profit reserves. Might be a slow burn either way.
#3 - I suspect that is that scenario eventuated, SP's would get a re-rating due to the one-off nature of the event.

But as I said, I'm no tax expert!!