Exposure draft legislation on franked distributions and capital raising

Treasury recently released exposure draft legislation regarding the franking credits on dividends funded by capital raising on 14 September 2022. This comes long after the measures were first announced by the previous Government in the 2016-17 Mid-Year Economic and Fiscal Outlook. This announcement indicated that when the proposed measures become law, they will apply retrospectively to dividend distributions made on or after the announcement on 19 December 2016.

We provide a summary of the retrospective changes that the Government is proposing to introduce, along with comments on the three main issues with the proposed measures included in the exposure draft legislation here: No franking credits on dividends funded by capital raisings.

In response to Treasury’s request for comments on the exposure draft legislation, the BDO National Tax team has prepared a submission.

Download the submisison

If you have any questions about this technical update, or would like more information on Corporate & International Tax, please contact your local BDO adviser.