If you are paid or credited dividends or non-share dividends, you must include all of 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 Your franking tax offset for eligibility).
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. If 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 (2%), which makes a total rate for 2022–23 of 47%. 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 question 11 – label V. 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 question 11 – labels S, T, U and V (if applicable) on his 2023 tax return.
Continue to: Effect on tax payable