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Fully franked dividends and dividne reinvestments , DRIP, page-2

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woollydog

3,505 Posts.

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04/02/21

12:31

Post #: 50703852
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Originally posted by Kjuagutt: ↑

Can any one clear up the issue with Drip and the tax office advice, copy below.Is it still taxable if the dividend is fully franked?

Example: Dividend reinvestment plansNatalie owns 1,440 shares in PHB Ltd. The shares are currently worth $8 each. In November 2019, the company declared a dividend of 25 cents per share.Natalie could either take the $360 dividend as cash (1,440 × 25 cents) or receive 45 additional shares in the company (360 ÷ 8).Natalie decided to participate in the dividend reinvestment plan and received 45 new shares on 20 December 2019. Even though she did not receive the physical cash and obtained shares instead, the $360 dividend is to be declared as assessable dividend income in her 2019–20 income tax return.For CGT purposes, she acquired the 45 new shares for $360 on 20 December 2019.

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all dividends must be entered on tax return as income. but the franking credits also entered on the tax return will offset it.
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