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  • How non-share dividends are taxed



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    The imputation system applies to non-share dividends in the same way that it applies to dividends. A non-share dividend may be franked or unfranked. Any amount of the dividend, whether franked or unfranked, or any amount of franking credit carried by the dividend should be shown at the appropriate place on the tax return as if it were a dividend paid on shares.

    Dividends on non-equity shares

    Under the imputation system dividends paid on certain shares that are classified as non-equity shares - for example, some redeemable preference shares - are treated as unfrankable distributions for imputation purposes. As a consequence these dividends cannot be franked. For more information, see the publication Debt and equity tests: guide to the debt and equity tests.

    Last modified: 29 Jun 2010QC 27989