If you are paid or credited dividends, or non-share dividends, you are required to include the following amounts in assessable income on your tax return:
- the unfranked amount
- the franked amount
- the franking credit - provided you are entitled to a franking tax offset in respect of the franking credit (see below for eligibility)
We show you below how John would complete item 11 on his tax return, using the figures in the example.
You can see on the COALS TYER statement that John had no TFN amount withheld from the dividends he was paid or credited. Where a resident shareholder does not provide an Australian company with their TFN, the company is required to deduct tax from the unfranked amount of any dividend at the highest income tax rate for individuals (47%) plus Medicare levy (1.5%) - a total rate for 2003-04 of 48.5%. As John advised COALS TYER Ltd of his TFN, no TFN amount was withheld.
If John had not advised COALS TYER Ltd of his TFN, a TFN amount would have been withheld from the unfranked amount of the dividend and shown by John on his tax return at V item 11. A credit for the TFN amount withheld would then be allowed in John's tax assessment.
If John received more than one dividend statement during the income year, he would need to show the total amounts at S, T, U and V (if applicable) item 11 on his 2003-04 tax return.