Labor's Grandma Tax, page-51

As I mentioned in my previous posts, company’s weren't compelled to pay franked dividends and my understanding is that this may still be the case.

4. Subsection 705-50(1) provides that its object '... is to limit deferral of tax on profits that were not subject to tax because of *over-depreciation of assets and were distributed to recipients untaxed because of their entitlement to the intercorporate dividend rebate.

Prior to the introduction of imputation credits, it was the dividends recipient who deferred the tax portion to the ATO.

One could argue that Keating limited their entitlement - the witheld portion- for immediate use, with the introduction of imputations credit.
They lost the right to reinvest it immediately the witheld portion or spend it as they choose too.

This put into question whose interests should the BOD place as a major priority; paying more taxes then they need too, or giving shareholders a bigger dividends as unfranked.

Unfortunately, BOD have succumbed to the sweetheart deal given to them by Keating.

Radicol Views