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  • Effect on tax payable



    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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    The following example shows how the fully franked dividend of $700 and unfranked dividend of $200 from COALS TYER Ltd affect John's tax liability. It is assumed that John has other income of $40,000. Medicare levy is not included in the calculation.


    Unfranked dividend received


    Franked dividend received


    Imputation credit-non-cash


    Other taxable income


    Total assessable income


    Tax on $41 200-assessed at 2001-02 rates


    Less franking tax offset


    Tax payable



    End of example

    John's assessable income includes the imputation credit in addition to the franked and unfranked dividends, and John's tax is based on this higher figure. However, he is able to use the tax already paid at the company level-the franking tax offset-to reduce the amount of tax that he has to pay.

    Last modified: 13 Dec 2019QC 27432