• Explanation of common terms

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Question

    What is a franked dividend?

    Answer

    Franked dividends are payments made to shareholders on which the company has already paid tax.

    Question

    What is an imputation credit?

    Answer

    An imputation credit is your share of tax paid by a company on the profits from which your dividends or distributions are paid. There are a number of different names for an 'imputation credit'. Your statement may show 'imputed tax credit', 'imputed credit', 'Class C imputation credit', 'imputation tax credit', 'Class C imputed credit', 'franking credit' or 'Australian imputed tax credit at the rate of 34% '

    Question

    What is an unfranked dividend?

    Answer

    Unfranked dividends have had no Australian company tax paid on them before being paid to shareholders. If the dividend is unfranked there is no imputation credit.

    Question

    What are tax file number (TFN) amounts withheld from dividends?

    Answer

    TFN amounts withheld are amounts withheld or deducted by the company or managed fund if you did not provide them with your TFN

    Question

    What is a dividend statement?

    Answer

    A dividend statement is sent to shareholders by companies to advise the dividend amounts and whether they are franked or unfranked, the amount of imputation credit and TFN amounts withheld (if any).

    Question

    What is a distribution statement?

    Answer

    A distribution statement (also called a taxation statement) is sent to people who have invested in managed funds or unit trusts. The statement should show the amount of any franked dividends and imputation credits.

    Last modified: 23 Dec 2005QC 16274