Simplified imputation - the tax effect of receiving a franked distribution

This fact sheet provides information on the tax effect of receiving a franked distribution. This fact sheet also contains links to other fact sheets in the series on imputation.

Key points

  • The simplified imputation system took effect from 1 July 2002.
  • The intercorporate dividend rebate for franked dividends has been removed.
  • Corporate tax entities that receive franked distributions on or after 1 July 2002 are required to include both the franked distribution and the attached franking credits in their assessable income. This treatment of franked distributions is commonly referred to as the 'gross-up and credit' approach.
  • The gross-up and credit approach is the same approach used by most other entities, other than partnerships and trusts.
  • The tax effect of receiving a franked distribution for entities, other than for corporate tax entities, is the same as that under the former imputation system.

Status and changes

This fact sheet replaces a previous fact sheet published on 11 July 2002.

    Last modified: 28 Jul 2016QC 16622