Franking in a capital raise environment

As detailed by Stephen Carpenter, Hannah Hesse, Stacey Hannam and Tom Beddoe, care needs to be taken with the new provisions in relation to franking credits when there has been or will be a capital raise.

There is a risk, from 28 November 2023, that franked dividends paid as part of schemes of arrangements where there is a capital raising may be unfrankable. Section 207-159 of the Income Tax Assessment Act 1997 (ITAA 1997) was introduced as an integrity measure to discourage capital raising arrangements which are entered into for the purpose (other than the incidental purpose) and with the principal effect of, funding distributions to accelerate the release of franking credits to shareholders...

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Authors: Stephen Carpenter, Hannah Hesse,

Published Date: 05 December 2024