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Taxation implications

Last updated 23 December 2019

If you are paid or credited dividends or non-share dividends, you must include the following amounts in assessable income on your tax return:

  • the unfranked amount
  • the franked amount, and
  • the franking credit, provided you are entitled to a franking tax offset in respect of the franking credit (see Your franking tax offset for eligibility).

We show you on the next page how John would complete item 11 on his tax return, using the figures in the Coals Tyer Ltd example.

You can see on the Coals Tyer Ltd statement above 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 must deduct tax from the unfranked amount of any dividend at the highest income tax rate for individuals (45%) plus the Medicare levy (1.5%), which makes a total rate for 2013–14 of 46.5%. As John had 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 2014 tax return.