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Dividend franking benefits
blacksheep
post Posted: Mar 24 2019, 05:57 PM
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In Reply To: nipper's post @ Mar 24 2019, 02:38 PM

I think it was a franking credits for dummies explanation

You like Frydenberg or Wilson (Tim) version better - "retirement tax" sadsmiley02.gif



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Mar 24 2019, 02:38 PM
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In Reply To: blacksheep's post @ Mar 24 2019, 02:14 PM

No wonder West's fellow travelers just lost NSW election



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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blacksheep
post Posted: Mar 24 2019, 02:14 PM
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Interesting read
The Facts of Life: Qantas, the CBA and the Franking Credits Factory
QUOTE
John: So, where do franking credits come from?

Peter: The ATO, that’s where franking credits are born … think about franking credits like a gift voucher.

Brenda: Shop vouchers never pay out cash … but, since John Howard changed the rules, franking credits do. Pretty good vouchers! No wonder people want them.

Peter: Spot on, Mum. And the ATO is well aware that they may have to pay out cash when someone redeems a franking credit. The cash the ATO got from the sale of the franking credits to CBA may never go to fund a hospital or a road. It might go to you, Mum, in cash.

John: So the government can never use that part of CBA’s tax?

read complete article - https://www.michaelwest.com.au/the-facts-of...redits-factory/



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
lgrif
post Posted: Dec 23 2016, 11:09 AM
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In Reply To: nipper's post @ Dec 22 2016, 12:44 PM

Yeh Nipper. The purchase date & the sale date don't count.

 
nipper
post Posted: Dec 22 2016, 12:44 PM
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In Reply To: BobE's post @ Dec 22 2016, 12:32 PM

best to take 47 actual calendar days. Buy, hold for 45, Sell on subsequent day(s).



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
arty
post Posted: Dec 22 2016, 12:44 PM
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In Reply To: BobE's post @ Dec 22 2016, 12:32 PM

Hi Bob,
Google 'what does "holding shares at risk" mean?'
Only one result came up with a rather lengthy yet exhaustive explanation:
http://www.tved.net.au/index.cfm?SimpleDis...te_Amounts.html

AFAIK there haven't been any changes since the paper was published.



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)

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BobE
post Posted: Dec 22 2016, 12:32 PM
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In Reply To: balance's post @ Dec 22 2016, 12:17 PM

Hi Balance....I am interested to know if the ATO has a definition of ' at risk ' .

I have wondered at times if shares are really at risk on a Saturday and Sunday and if the 45 days relates to calendar days or business days....I have always assumed calendar days, but have not been able to find an ATO definition.

 
balance
post Posted: Dec 22 2016, 12:17 PM
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In Reply To: smithy's post @ Dec 22 2016, 12:03 PM

https://www.ato.gov.au/Forms/You-and-your-s...013-14/?page=11

The holding period rule requires you to continuously hold shares ‘at risk’ for at least 45 days (90 days for certain preference shares) to be eligible for the franking tax offset. However, under the small shareholder exemption this rule does not apply if your total franking credit entitlement is below $5,000, which is roughly equivalent to receiving a fully franked dividend of $11,666 (based on the current tax rate of 30% for companies).

This means that you must continuously own shares ‘at risk’ for at least 45 days (90 days for certain preference shares) not counting the day of acquisition or disposal, to be eligible for any franking tax offset.

Days on which you have 30% or less of the ordinary financial risks of loss and opportunities for gain from owning the shares cannot be counted in determining whether you hold the shares for the required period.

The financial risk of owning shares may be reduced through arrangements such as hedges, options and futures.

If you acquire shares or an interest in shares and you have not already satisfied the holding period rule before the day on which the shares become ex-dividend, the holding period rule commences on the day after the day on which you acquired the shares or interest. The shares become ex-dividend on the day after the last day on which acquisition of the shares will entitle you to receive the dividend. You must hold the shares or interest for 45 days (90 days for certain preference shares) excluding the day of disposal. For each of these days you must have 30% or more of the ordinary financial risks of loss and opportunities for gain from owning the shares or interest.

You have to satisfy the holding period rule once only for each purchase of shares. You are then entitled to the franking credits attached to those shares, unless the related payments rule applies.





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smithy
post Posted: Dec 22 2016, 12:03 PM
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To get maximum benefits from dividend franking I understand that you have to keep the shares for 47 days. I am unable to find from which date
this period is calculated: ex- dividend date, record date or unlikely payment date. I would appreciate if someone would advise me as to what the correct date is.

Thank you,
smithy.

 
 



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