Labour BS!
What is Labour thinking? Surely retrospective disallowance of franking credits on special dividends and dividends following capital raising is unfair? Investors have made financial decisions based on these rules!
AFR this morning: “Labour is at it again in surprise move on dividends”
“The Albanese government has shocked investors by proposing to retrospectively stop companies paying shareholders fully franked dividends that are funded by capital raisings.
The crackdown on dividend imputation credits will affect retail investors and superannuation funds receiving special dividends outside of the usual dividend payment cycle and companies that issue new equity to fund distributions to shareholders.
Treasury forecasts the “franked distributions and capital raising” measure will raise a relatively modest $10 million a year, but investors fear the cost to them will be larger.
The government has proposed backdating the “integrity measure” to 2016 to ensure that only distributions equivalent to realised profits can be franked, alarming investors in companies that have paid special dividends or issued new shares in the past six years.
The change could disallow some franking credits paid to retail shareholders, superannuation funds and trusts that receive dividends from public and private companies.
BDO tax partner Mark Molesworth said investors could receive surprise tax bills for special dividends they received since December 2016.”
Surprise tax bills retrospectively? What absolute BS!