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  • Related payments rule



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

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    In certain circumstances, the related payments rule prevents you from claiming a franking rebate on franked dividends paid or credited on shares if a related payment is made under an arrangement entered into on or after 7.30 p.m. AEST on 13 May 1997. This rule applies if both of the following conditions are present:

    • you are under an obligation to pass on the dividend to someone else and
    • you are not holding the shares 'at risk' around the dividend period.

    Under the related payments rule you must be a qualified person for the payment of each dividend or distribution. To be a qualified person in relation to a dividend or distribution, you or your associate must hold the relevant shares or interest at risk for the relevant qualification period of 45 days-or 90 days for preference shares.

    Being a qualified person for the payment of current dividends or distributions does not mean that you are automatically a qualified person for future dividends or distributions. That is, you must satisfy the test for all subsequent dividends and distributions.

    Last modified: 23 Dec 2019QC 16138