A franking credit is a nominal unit of tax paid by companies paying tax in countries that have a dividend imputation system. Franking credits are passed on to shareholders along with dividends. Shareholders include in their assessable income not the dividends received but the grossed-up amount back-calculated from that dividend and the current tax rate, then have their income tax payable calculated thereupon, then use franking credits to offset tax payable at the rate of a dollar per credit. In Australia and New Zealand the end result is the elimination of double taxation upon company profits. A company in the broadest sense is an aggregation of people who stay together for a common purpose. ... Double taxation of corporate dividends ceased to exist in Australia in 1987 after the introduction of Dividend Imputation. ... A shareholder or stockholder is an individual or company (including a corporation), that legally owns one or more shares of stock in a joint stock company. ... A dividend is the distribution of profits to a companys shareholders. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... Income tax is a direct tax which is levied on the income of private individuals. ... Australia, officially the Commonwealth of Australia, is the sixth-largest country in the world, the only country to occupy an entire continent, and the largest in the region of Australasia/Oceania. ... New Zealand is an independent sovereign state in the south-western Pacific Ocean. ... Double taxation is a situation in which two or more taxes must be paid for the same asset or financial transaction. ...
A franking privileged person adds his or her signature or a facsimile thereof to the upper right corner of a letter or parcel in lieu of a postage stamp.
Franking is one of the largest advantages of incumbency, contributing to a very high reelection rate in the U.S. legislative branch.
The refund applies to frankingcredits attached to frankeddividends paid to a resident individual on or after 1 July 2000 or, if a resident individual receives frankeddividends indirectly through a trust or a partnership, to frankingcredits attached to frankeddividends paid to the trust or partnership on or after 1 July 2000.
Frankeddividends are payments made out of profits by an Australian resident company to its shareholders that carry 'frankingcredits' (that is, the company paid tax on its table income at the rate of 30%).
Because both the trust income and partnership income has been 'grossed up' to include the frankingcredit at the trust and partnership level, it is unnecessary for the individual beneficiary or partner to gross up the amounts received in their own tax return.
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