gmt said "Watchout you don't lose franking credits. 45 day hold...

gmt said

"Watchout you don't lose franking credits. 45 day hold time I believe, if your total divs for the year will be less than $5k the 45 day hold does not apply"

Wrong. If your total franking credits are $5k or more in one financial year you can't utilise the small shareholder exception to the 45 day holding rule. This equates to receiving about $11,666 in fully franked dividends.

There is a lot of information on this issue on the ATO site www.ato.gov.au

specifically
http://www.ato.gov.au/individuals/content.asp?doc=/content/8651.htm

and
http://www.ato.gov.au/individuals/content.asp?doc=/content/42807.htm&page=10#H33

From the ATO site "Holding period rule
The holding period rule requires you to hold shares ‘at risk’ for at least 45 days (90 days for preference shares) to be eligible for the franking tax offset. This rule, however, does not apply if your total franking credit entitlement is below $5,000. This is roughly equivalent to receiving a fully franked dividend of $11,666, based on the current tax rate of 30% for companies.

All this means is that you must own shares for at least 45 days, or 90 days for preference shares (not counting the day of acquisition or disposal), before being entitled to any franking tax offset.

Days on which you have 30% or less of the ordinary financial risks of loss and opportunities for gain from owning the shares cannot be counted in determining whether you hold the shares for the required period.

Financial risk of owning shares may be reduced through arrangements such as hedges, options and futures."


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