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.

    Last modified: 09 Jul 2014QC 17505