Under Subdivision 375-H of the ITAA 1997 taxpayers are able to claim deductions for amounts paid by them for shares in a company which has been granted a license to raise concessional capital under the Film Licensed Investment Company Act 2005. Deductions are not available for shares issued after 30 June 2007. Further, Division 375 will be repealed with effect from 1 July 2010.
The FLIC tax concession allows certain returns of concessional capital (that is, capital invested in a FLIC during its licence period) to be treated as franked dividends. If you are an investor in a FLIC, you may have received a notice from the company advising that it is returning to you an amount of concessional capital that is, for tax purposes, a franked dividend. The FLIC will advise you of the amount of your dividend and the franking credit.