For the purposes of the imputation system, debt/ equity rules dealing with non-share equity interests are designed to apply to non-share dividends in the same way that they apply to dividends. A non-share dividend may be franked or unfranked. Any amount of the dividend, whether it be franked or unfranked, or any amount of imputation credit carried by the dividend, should be shown at the appropriate place on the tax return as if it were in respect of a share.
Non-equity share dividends
Under the debt/ equity rules, dividends paid on certain interests, which are shares in legal form, are treated as not being dividends for imputation purposes. In consequence, these dividends cannot be franked. The Guide to the debt and equity tests contains an example of a redeemable preference share which would be a non-equity share.