Peter: yes you are right, leave it to an accountant because my assumption of fully franked dividends being outside the taxation net is where my logic is breaking down.
Euro: thanks for the feedback. I really thought that post 1987 tax was only paid once. 100% fully franked meant the company had paid the lot and you didn't have to declare anything at tax time.
I have to do heaps more research re taxation! The only excuse I can make is at tax time traditionally this has never arisen (never had shares before) and I have never given it a moments thought. Having read your response and looked into "franking credits" the picture is becoming a little clearer (just might take a tad longer to absorb all the implications).
Yeah you are both probably right, hold the profits, albeit paying at a higher tax rate 08/09, and just keep chipping away.
