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  • Explanation of common terms

    Attention

    Warning:

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

    End of attention

    Dividend income

    If you own shares in a company, you will generally be paid your share of the company's profits as a dividend.

    Franked dividend

    Franked dividends are payments made to shareholders or to holders of non-share equity interests on which the company has already paid tax.

    Non-share equity interest

    From 1 July 2001, certain interests which are not shares are treated in a similar way to shares for tax law purposes. These interests are called 'non-share equity interests'.

    Imputation/franking credit

    An imputation/franking credit is your share of tax paid by a company on the profits from which your dividends or distributions are paid. 'Imputation/franking credit' can also be referred to as 'imputed tax credit', 'imputed credit', 'Class C imputation credit', 'imputation tax credit', 'Class C imputed credit', 'franking credit' or 'Australian imputed tax credit at the rate of 30 per cent'.

    Unfranked dividend

    Unfranked dividends have had no Australian company tax paid on them before they are paid to shareholders or to holders of non-share equity interests. If the dividend is unfranked, there is no imputation/franking credit.

    Total dividend income

    Total dividend income is the total of your unfranked dividends, franked dividends and your imputation/franking credits.

    Tax file number (TFN) amounts withheld

    Tax file number (TFN) amounts withheld are amounts withheld or deducted by the company or managed fund if you did not provide your TFN.

    Dividend statement

    A dividend statement is sent to shareholders and to holders of non-share equity interests by companies to advise them of the amount of dividends paid to them. It also advises whether the dividends are franked or unfranked, the amount of imputation/franking credit and TFN amounts withheld (if any).

    Distribution statement

    A distribution statement (also called a taxation statement) is sent to investors in managed funds or unit trusts. The statement may include unfranked dividends, franked dividends, tax file number amounts withheld and imputation/franking credits.

    Managed fund

    A Managed fund is generally run by an organisation that manages investors' money through a diversified portfolio for a fee. Managed funds may include investment in any or all of the major asset groups such as cash, bonds, shares and property.

    Last modified: 09 Dec 2019QC 16834