Exceptions to the benchmark rule
The benchmark rule applies to all corporate tax entities except the following:
- A company, that at all times during the franking period, is a listed public company that, under its constituent documents, must frank all distributions made to its members under a single resolution at the same franking percentage; and any distributions made under a resolution during the period are made to all members of the company.
- A company, that at all times during the franking period, is a listed public company with a single class of membership interest.
- A listed public company with more than one class of membership interest where the distribution and franking rights are the same for each class of membership interest.
- A 100%-owned subsidiary of a company that is exempt from the benchmark rule will itself be exempt from the benchmark rule.
Membership interests that do not carry a right to receive distributions will be ignored in determining whether a company is exempt from the benchmark rule.
The exemptions from the benchmark rule recognise certain circumstances in which dividend streaming is not possible or is unlikely.