How non-share dividends are taxed

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



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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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.

Last modified: 01 Jul 2006QC 27783