The Assistant Treasurer says the Government will prevent dividend washing by inserting a specific integrity rule in the tax law. Mr Bradbury said that in developing the approach, the Government had worked with the business community, in particular with the Australian Financial Markets Association, the Australian Custodial Services Association, the Financial Services Council and the Tax Institute.
“Our approach will ensure that sophisticated investors are no longer able to receive 2 sets of franking credits on what is essentially the same parcel of shares,” said Mr Bradbury. He added that the measure “will not have an impact on typical ‘mum and dad’ investors, as it will only apply to investors that have franking credit tax offset entitlements in excess of $5,000”.
Treasury received 10 submissions in response to its discussion paper on preventing dividend washing. A summary of the submissions and the Government’s responses are available on the Treasury website.
Source: Assistant Treasurer’s media release, 28 June 2013
[LTN 123, 28/6/13]