Australian Franking Credits

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Mark,

This may have been asked before but a search on "franking" did not produce a result.

Australian share dividends are often distributed with a component of tax already paid by the company - at the company tax rate of 30%.

If you pay tax at less than that rate you are entitled to a refund from the Department of Taxation. For example, if you received a fully franked dividend of $A1 and your tax rate was zero, you would get a refund of 30 cents.

In these circumstances, your true rate of return is greater than just comparing the dividend to the share price.

Is there any way to handle this with FM?

For Fund Manager to handle it in an "automated" fashion I imagine you would have to be able to enter the % of franking and your rate of tax for every dividend, and this is probably unrealistic for most of your users.

Is another alternative to add the franking credit as "interest payment"?

I'm probably missing some very straight-forward solution, and look forward to your ideas.

Regards,

Don

Replies:

• Re: Australian Franking Credits Don 20:44:18 03/23/04 (0)