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  • Related payments rule

    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

    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: 05 Dec 2006QC 16138