Direct receipt of a distribution
The imputation system ensures consistent treatment for most members in direct receipt of franked distributions by applying the same gross-up and credit approach to.
- an individual
- a corporate tax entity, and
- an eligible superannuation fund, approved deposit fund or pooled superannuation trust.
Generally the introduction of the simplified imputation system has not changed the way taxpayers who are individuals treat a franked distribution.
However, the introduction of the gross-up and credit approach for companies replaces the inter-corporate dividend rebate that was formerly available to companies.
Where a member receives a franked distribution directly, the receiving member includes both the distribution and any franking credit in their assessable income. The entity is then entitled to a tax offset equal to the franking credit.