Franking a distribution

  • A NZ franking company franks a distribution by allocating franking credits to it.
  • Only distributions that are frankable can have franking credits allocated to them. This may require a consideration of the Australian debt and equity rules.
  • Frankable distributions can only be franked to the maximum franking credit amount. There are formulas for calculating the maximum franking credit for a distribution.
  • A NZ franking company will not be able to frank distributions if they are paid within one month of making the NZ franking choice.
  • Conduit tax relief additional dividends and supplementary dividends paid by NZ franking companies will be unfrankable.
  • A NZ franking company will be able to attach both Australian franking credits and NZ imputation credits to the same dividend.
    Last modified: 07 Oct 2015QC 16903