Franking credit trading
Generally, franking credit trading occurs when franking credits are diverted from the true economic owners of the membership interests to others with more use for those franking credits.
The main provisions in place to address franking credit trading are:
- exempting entity rules
- the holding period rule
- the related payments rule, and
- the anti-avoidance provisions in sections 177 EA and 177EB ITAA 1936.