The imputation system applies to non-share dividends in the same way that it applies to dividends. A non-share dividend may be franked or unfranked. Any amount of the dividend, whether franked or unfranked, or any amount of franking credit carried by the dividend should be shown at the appropriate place on the tax return as if it were a share.
Dividends on non-equity shares
Under the imputation system, dividends paid on certain shares that are classified as non-equity shares - for example, redeemable preference shares - are treated as unfrankable distributions for imputation purposes. As a consequence, these dividends cannot be franked. The Guide to the debt and equity tests, available on our website, contains more information on the debt and equity tests.