Notes for completing J Unfranked dividend amount, K Franked dividend amount, L Dividend franking credit
J, K and L refer to dividends derived from investments in resident entities (Australian payers), including listed investment companies.
Dividends or non-share dividends that the fund receives from Australian payers may carry franking credits. Such dividends are called franked dividends, and the franking credits they carry reflect the amount of tax paid by the payer.
Dividends and non-share dividends where no tax has been paid are called unfranked dividends.
Add all the franked and unfranked dividend amounts received and all the franking credits to determine the fund’s assessable income from these dividends.
Non-share dividends are treated in the same way as dividends. Show the amount of the non-share dividends, whether franked or unfranked, and any amount of franking credit attached to those dividends, at the appropriate place on the tax return as if they were for shares.
- Non-share dividends are returns paid on non-share equity interests. These interests are not shares in legal form but are treated in the same way as shares under the debt and equity rules. Debt and equity tests: guide to the debt and equity tests provides an overview of the debt and equity rules and explains what a non-share equity interest is.
To the extent that FTDT has been paid on a dividend (including a non-share dividend) paid or credited to the fund by a company that has made an interposed entity election, do not include in the assessable income of the fund the amount that is made not assessable income and not exempt income by section 271-105 in Schedule 2F to the ITAA 1936.
- Any losses or outgoings that the fund incurred in deriving an amount that is excluded from assessable income because FTDT has been paid are not deductible.
- The fund cannot claim a franking credit tax offset for any franking credit attributable to the whole or a portion of a dividend that is excluded from assessable income because FTDT has been paid.
If a complying superannuation fund, complying ADF or a PST received a dividend from a private company, you must establish whether the dividend is non-arm's length income. If the dividend is non-arm's length income, show the dividend amount (along with any attached franking credit for which the fund is entitled to a franking credit tax offset) at U Net non-arm’s length income.
For more information, see TR 2006/7 Income tax: special income derived by a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust in relation to the year of income.
Dividends that form part of a share of net income from trusts must be shown at N or O and P and not at J, K or L (unless it is non-arm’s length income in which case it is included at U Net non-arm’s length income).
Dividends that form part of a partnership distribution are shown at I and not at J, K or L (unless it is non-arm’s length income in which case it is included at U Net non-arm’s length income).