Australia Implements Integrity Rule to Prevent Distribution of Franking Credits Funded by Capital Raising

The Australian Taxation Office (ATO) has announced the implementation of a new integrity rule to prevent the distribution of franking credits funded by capital raising. The ATO has also launched a public consultation on related guidance.

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Franked distributions funded by capital raisings

New legislation restricts franking credits where capital is raised for the purpose of funding franked distributions.

As part of the 2016-17 MYEFO, the government announced changes to prevent franking…