Dividends and franking

[samdaman]

Hey guys!

here again trying not to clog the forum up with too many questions but I'm having a bit of a mare with the idea of franking and imputation credits. This is all in the venture to find how much I will actually recieve before tax and so on.

So real world example. http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=CDA#dividends

CDA.AX 2 dividend payments throughout the year. 100% franked, (in further notes there is the same amount at 30% is this further dividends or is this something else I am unaware of.)

so 2 questions.

- How much will I receive in this scenario?
- How do I calculate received dividend amount for fully and partially franked dividends?

Cheers for the help guys, much appreciated.
Sam

[winner69]

Hey guys!

here again trying not to clog the forum up with too many questions but I'm having a bit of a mare with the idea of franking and imputation credits. This is all in the venture to find how much I will actually recieve before tax and so on.

So real world example. http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=CDA#dividends

CDA.AX 2 dividend payments throughout the year. 100% franked, (in further notes there is the same amount at 30% is this further dividends or is this something else I am unaware of.)

so 2 questions.

- How much will I receive in this scenario?
- How do I calculate received dividend amount for fully and partially franked dividends?

Cheers for the help guys, much appreciated.
Sam

Are you a NZ Resident taxpayer

[samdaman]

yup born and raised a kiwi

[belted galloway]

Are you a New Zealand resident? If so, you have no entitlement to any imputation credits gained from Australian holdings.

[winner69]

The 100% means the whole dividend has franking credits applied to it. The @30% is the the tax rate used.

But as belted says you can't take advantage of the franking credits as a nz resident taxpayer.

For the example you posted you will get 7 cents and 1.5 cents(aud) which are deemed as overseas income and need to be declared as such ....so you end up paying tax in nz (with no offset like the Aussies get)

[samdaman]

lets say they pay 1 dividend per year of 10c fully franked. I would receive 4.29c in franking credits. How are these translated into money? I don't quite understand their benefit to me.

[winner69]

lets say they pay 1 dividend per year of 10c fully franked. I would receive 4.29c in franking credits. How are these translated into money? I don't quite understand their benefit to me.

The franking credits no value to you as a nz'er

[samdaman]

ok lets say the franking credits are from a NZ company?

[winner69]

ok lets say the franking credits are from a NZ company?

If they are Australian Franking Credits worth zilch

If they are NZ Imputation Credits you can use (calc on nz tax profits only)

Do you have a example of this

[samdaman]

WHS.NZ https://www.nzx.com/markets/NZSX/securities/WHS/dividends

Do I just add the imputation credits to the amount I receive then tax it to calculate the amount I get in hand.

[winner69]

You should have got a dividend statement showing the gross amount and the imputation credits applied. Generally gross less imp credit is the declared dividend

Both are declared in your annual tax return

[samdaman]

cool cheers winner, always appreciate your additions :)

[barleeni]

Newbie myself, so was just looking at this today, took me a while to figure it out! Basically (assuming an NZ company, and an NZ shareholder) if company dividend is $100, and it is 100% imputed then what they will actually pay out gross is $100 x (1/0.72) = $138.89 gross dividend, or in other words they would attach $38.89 in imputation credits. The 0.72 figure comes about because the company tax rate is 28% (100% - 28% = 72%) Then, if your personal tax rate is 33% it will be deducted from the total of the dividend plus credits, so your net dividend would be calculated as $138.89 x 67% = $93.06.

If the same $100 dividend was only 50% imputed, the first $50 of your dividend would have no imputation credits and would be taxed at your full personal tax rate, so if that was 33%, then of the first $50 you would only get $33.50 net. The last $50 of the dividend which was imputed would gain $19.44 of imputation credits (which is $50 x 1/0.72), this would bring the total up to $69.44 inclusive of credits. That value ($69.44) would have your tax deducted at 33% leaving $46.52 for you.

So in total a $100 dividend with 50% imputation would give you a net dividend of $33.50 + $46.52 = $80.02.

Complicated enough!

[arc]

Does anyone here invest "for" dividends in the US market. Im new to this scene so I'm collecting "thoughtful insights". I have been browsing googles financial site and used the stock-scanner to filter US dividend paying companies.
Does anyone here have experience with div payouts from over-there, positive/negative issues?. comments?.


"Company---------------------symbol-----Mkt-cap-----P/E ratio----Div Yield%---52w price change% "
---------------------------------------------------------------------------------
"Origen Financial, Inc. ---------------- ORGN---$ 38.37M --- - ------29.14 -------4.86"
"Pinpoint Recovery Solutions Corp--- PPNT----$ 461,759.00 - ------20.00-------- 33.33'
"Orchid Island Capital Inc-------------ORC-----$ 118.65M---34.64---16.49--------10.64"
"Central Securities Corp--------------CET------$ 565.01M---3.99-----15.82-------13.34"
"Magyar Telekom Tavkozlesi Nyrt---MYTAY---$ 1.58B------13.35----14.74-------8.44"
"New York Mortgage Trust Inc------NYMT-----$ 721.18M-----7.96-----13.30------19.41"
"Javelin Mortgage Investment Corp-JMI------- $ 161.95M---------------13.27----- 1.42"