Dividend franking credits

[hhvinhh]

Your calculation is correct. I'm not sure how you reached the conclusion you will have a loss?

$17.21 (30% of the gross amount) has already been paid in tax. As your marginal rate is 32.5% you will only have to pay an additional 2.5% in tax, which equals $1.43.

Thanks for your quick reply McLovin.

Silly me. So the net position should be $40.15 - $ 1.43 = $38.72 right?

 

[McLovin]

Thanks for your quick reply McLovin.

Silly me. So the net position should be $40.15 - $ 1.43 = $38.72 right?

Yep.

 

[Muschu]

Hi

Can someone help with this please?

With a dividend which was paid on 11/4, what is the earliest I can sell the stock and retain the franking credits?

With thanks

Rick

 

[McLovin]

Hi

Can someone help with this please?

With a dividend which was paid on 11/4, what is the earliest I can sell the stock and retain the franking credits?

With thanks

Rick

You have to have held the shares for 45 days. If on the 11/4 you have held the shares 45 days then you can sell then. You don't need to wait until the cash amount is paid to you, once the stock is ex dividend (assuming you've held for 45 days) you can sell it and still get the divvie + franking credits.

 

[Muschu]

You have to have held the shares for 45 days. If on the 11/4 you have held the shares 45 days then you can sell then. You don't need to wait until the cash amount is paid to you, once the stock is ex dividend (assuming you've held for 45 days) you can sell it and still get the divvie + franking credits.

Thx ML. I had these shares for much longer than 45 days before the divie was paid on 11/4. However I was under the impression that I had to hold them for a minimum number of days after that. Not so?

Thx for the quick response.

 

[McLovin]

Thx ML. I had these shares for much longer than 45 days before the divie was paid on 11/4. However I was under the impression that I had to hold them for a minimum number of days after that. Not so?

Thx for the quick response.

Nope. Once you've held them "at risk" (ie they can't be hedged) for 45 days, you're free to sell them whenever and still get whatever franking credits have been distributed to you.

 

[Muschu]

Can I just check something?

45 calendar days or 45 working [market open] days? I assume it is the former?

Many thanks

Rick

 

[McLovin]

Can I just check something?

45 calendar days or 45 working [market open] days? I assume it is the former?

Many thanks

Rick

Hey Rick

You assume correctly, it's 45 calendar days.

 

[Muschu]

Hey Rick

You assume correctly, it's 45 calendar days.

Many thanks McLovin

 

[13ugs13unny]

Hey Rick

You assume correctly, it's 45 calendar days.

But not including the days bought / sold
Might be wrong, but i think im right.

 

[ROE]

But not including the days bought / sold
Might be wrong, but i think im right.

Yup all calculation even for capital gain doesn't include the day you buy and sell so add 2 more days
If unsure I always add a couple days to be sure to be sure

 

[pixel]

Hi

Can someone help with this please?

With a dividend which was paid on 11/4, what is the earliest I can sell the stock and retain the franking credits?

With thanks

Rick

Unless I'm very much mistaken, it's not the date of payment that matters, but the day on which the share traded ex-dividend.
The 45-day rule also applies only if your total annual dividends exceed $5,000.
I any case, franking credits can NOT be claimed if an entity reports a tax loss for the FY.

 

[skc]

The 45-day rule also applies only if your total annual dividends exceed $5,000.

45-day rule for total annual franking credits >$5000, not total dividend.

However, under the small shareholder exemption this rule does not apply if your total franking credit entitlement is below $5,000, which is roughly equivalent to receiving a fully franked dividend of $11,666 (based on the current tax rate of 30% for companies)

http://www.ato.gov.au/Individuals/I...You-and-your-shares-2012-13/?default=&page=11

In any case, franking credits can NOT be claimed if an entity reports a tax loss for the FY.

Not sure what you meant by that?

 

[pixel]

45-day rule for total annual franking credits >$5000, not total dividend.
http://www.ato.gov.au/Individuals/I...You-and-your-shares-2012-13/?default=&page=11
Not sure what you meant by that?

Thanks for the correction, skc. My mistake.

My comment about tax losses referred to hypotheticals, where the costs of setting up or running a business leads to tax losses that exceed taxable income.

 

[McLovin]

My comment about tax losses referred to hypotheticals, where the costs of setting up or running a business leads to tax losses that exceed taxable income.

Then there'd be no franking credits available. Afterall, FC's only represent tax already paid.

 

[bigdog]

 

[sptrawler]

I love the look silly Billy is giving Bowen, "now make sure you give all the bad news, I don't want you leaving anything for me".
I wouldn't mind losing the franking credits, if all super funds lost them, but to give Industry Funds the franking credits is just outrageous. IMO

 

[Smurf1976]

I wouldn't mind losing the franking credits, if all super funds lost them, but to give Industry Funds the franking credits is just outrageous. IMO

Plus the non-super issues too.

 

[PZ99]

View attachment 91930

That is a very bad mistake. Most political parties plan at least two elections ahead. That's why Kim Beazley lost his job years ago. Labor knew they would win the 2007 election but were unconvinced about 2010 - so they replaced Kim with Rudd and we know what happened there.

This looks quite similar - smug arrogance which will prove costly. If a policy has merit - sell it.

 

[SirRumpole]

That is a very bad mistake. Most political parties plan at least two elections ahead. That's why Kim Beazley lost his job years ago. Labor knew they would win the 2007 election but were unconvinced about 2010 - so they replaced Kim with Rudd and we know what happened there.

This looks quite similar - smug arrogance which will prove costly. If a policy has merit - sell it.

Labor has worked out that the people most affected by this are Coalition voters anyway, and are doing the same thing that Howard told Labor voters when he introduced Workchoices.

That was disastrous for him, but I think the Coalition's time is up anyway.