Aust Franking Credits

I am a little confused re the handling of Aust Franking credits.
The general feeling is that for NZ investors you cannot claim these and they are of no value.

However a NZ resident having a Term Deposit in Aust can claim the Aust "Non Resident Tax" deduction from interest payments, ( which appears to vary and can be as much as 10%), in there NZ Tax Return. Hence you have the option of declaring the Net amount and ignoring the Aust Tax effect, or declare the Gross amount and claim the Aust Tax.

Therefore you must be able to use the same principle with Aust Franking Dividends, eg Declare the Gross Franked Dividend amount ( the net amount paid plus the Franking Credit), and claim the Franking, or, declare the Net Amount paid ( after Franking calculations) and ignore the Franking effect..

As the Franking rate is 30% your choice would depend on your yearly Tax Ratio, (if over 30% then declare the Net ).

Could somebody confirm or rebut.

RWW

NZ taxpayers cannot claim Australian franking credits, They can claim the Nonresident Withholding Tax as you.

If an Australia company had earnings in nz and if they had the desire to do so they could maintain separate nz imputation credits and let nz taxpayers access them. (Note nz companies can only get imputation credits on nz earnings only)

The other way around companies seem to be a bit keener to help shareholders. FBU for instance maintain nz imputation credits for nz residents (on nz earnings) but also maintain an Australia franking credits account (on Aussie earnings) for benefit of Aussie shareholders (insto eh)

Governments shoe little inclination to tidy this up

"We" keep trying every so often but Aussie do not seem interested, as it is appears to be of more benefit to us than to Aussies from what I understand. Think it will happen soonish, but don't hold your breath!

I have some shares in ANZ which I bought last year, and have received one set of dividends. According to this page, franking credits were applied as well as inputation credits: http://www.shareholder.anz.com/pages/dividends

However on my Sharesight portfolio, it's showing $0.00 as the inputation credits for the dividend.

I'm now a bit confused as to what I have to do for tax purposes. Is Sharesight just not showing the correct info and therefore I claim the 10c per share in my personal tax return?

Also, given these shares were franked at 30% but the imputation credit is only about 11%, does that mean that NZ residents pay 19% more tax than an Aussie resident? Sorry, still new to all of this.

You will need to have a look at your dividend statement, as winner says you can generally only claim non- resident withholding tax if any, unless imputation credits are stated and they usually say for NZ residents.

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Originally Posted by Cricketfan

I have some shares in ANZ which I bought last year, and have received one set of dividends. According to this page, franking credits were applied as well as inputation credits: http://www.shareholder.anz.com/pages/dividends

However on my Sharesight portfolio, it's showing $0.00 as the inputation credits for the dividend.

I'm now a bit confused as to what I have to do for tax purposes. Is Sharesight just not showing the correct info and therefore I claim the 10c per share in my personal tax return?

Also, given these shares were franked at 30% but the imputation credit is only about 11%, does that mean that NZ residents pay 19% more tax than an Aussie resident? Sorry, still new to all of this.

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Assuming you are nz tax resident ou can take advantage of the 10 cent imputation credit in thi year tax return. Use all the numbers on the dividend notice you should have got in december

The different rates for au franking credits and nz imputation is that nz imputation credits can only be applied to earnings made in NZ. At least anz now run a nz imputation account so not 'double taxed' on nz earnings

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Originally Posted by winner69

Assuming you are nz tax resident ou can take advantage of the 10 cent imputation credit in thi year tax return. Use all the numbers on the dividend notice you should have got in december

The different rates for au franking credits and nz imputation is that nz imputation credits can only be applied to earnings made in NZ. At least anz now run a nz imputation account so not 'double taxed' on nz earnings

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Thanks. So that means earnings outside of NZ are still double taxed? How do you compensate for this when looking at dividend yields on Aussie companies and comparing with NZ companies?

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Originally Posted by Cricketfan

Thanks. So that means earnings outside of NZ are still double taxed? How do you compensate for this when looking at dividend yields on Aussie companies and comparing with NZ companies?

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Something you have to take into account but something you have to live with - smaller real returns than an Aussie

What about the FIF rules?

They still apply to some Oz shares right?

Best Wishes
Paper Tiger

Disc: Not a NZ Tax-Resident

Some of them are excluded you can have look at IRD site. As for tax deducted in aussie, you can claim part of it. There is a formula in Income Tax Act. I can't remember of hand .

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Originally Posted by Paper Tiger

Disc: Not a NZ Tax-Resident

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If your not a tax resident, only income sourced in NZ is taxed in NZ. So the FIF rules dont apply.

But to answer your questions, the FIF rules dont apply to certain listed australian companies (I think they have to be tax resident in Australia).