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  • Dividends paid by listed investment companies (LIC) that include a LIC capital gain



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    If a LIC pays a dividend to you that includes a LIC capital gain amount, you may be entitled to an income tax deduction.

    You can claim a deduction if:

    • you are an individual
    • you were an Australian resident when a LIC paid you a dividend, and
    • the dividend included a LIC capital gain amount.

    The amount of the deduction is 50% of the LIC capital gain amount. The LIC capital gain amount will be shown separately on your dividend statement.

    You do not write the LIC capital gain amount at item 17 (or item 9 if you use the tax return for retirees).

    Example 20: LIC capital gains

    Ben, an Australian resident, was a shareholder in XYZ Ltd, a LIC. In the 2006-07 income year, Ben received a dividend from XYZ Ltd of $70,000 including a LIC capital gain amount of $50,000. Ben can claim a $30,000 franking credit relating to the dividend. Ben includes on his tax return the following amounts:

    Franked amount
    (shown at T item 11 on his tax return)


    Franking credit
    (shown at U item 11 on his tax return)


    Amount included in total income


    Less deduction for LIC capital gain
    (shown as deduction at item D7 on his tax return


    Net amount included in income



    If Ben uses the tax return for retirees, he writes the amounts as follows: franked dividend at T item 8; franking credit at U item 8; deduction for LIC capital gain at item 12.

    End of example
    Last modified: 04 Mar 2016QC 19437