What conditions must be met before an entity may obtain a tax offset for franking credits?

In order for an entity to obtain a tax offset for franking credits it must:

  • satisfy a residency requirement
  • be subject to tax on the franked distribution (that is, must not be exempt from tax - this is subject to some exceptions), and
  • not manipulate the imputation system to obtain the benefit of franking credits.

If the entity is not entitled to a tax offset it will not be required to gross-up the amount of the franked distribution.

    Last modified: 28 Jul 2016QC 16622