Fully franked Aus dividends >> NZ Resident

[Corporate]

Being a New Zealand resident - when I receive dividends that are fully franked from listed australian companies, do I loose the benefit of the tax credit or is their a new zealand mechanism that eliminates the double tax?

Thanks
C

[shasta]

Being a New Zealand resident - when I receive dividends that are fully franked from listed australian companies, do I loose the benefit of the tax credit or is their a new zealand mechanism that eliminates the double tax?

Thanks
C

Yes, you lose the franking credits

Resident/Non Resident withholding tax is claimable though.

I thought the National party were going to look into the issue of imputation/franking credits with there Australian counterparts.

Would make sense, the companies pay the tax, why cant shareholders receive the benefit.

It's a loophole that should be addressed.

[Winston001]

This has been a part of trans-Tasman talks for more than a decade. I think Michael Cullen had reached a tax set-off agreement a few years ago but it never got to the details stage.

Loony situation in my opinion but then - what's in it for the Aussies? Not much.

[Jay]

Loony situation in my opinion but then - what's in it for the Aussies? Not much.

Just what I was going to say.

Thre is far more benefit to NZers than Aussies.
I think John Key has said it is on the agenda again but.......

[percy]

This has been a part of trans-Tasman talks for more than a decade. I think Michael Cullen had reached a tax set-off agreement a few years ago but it never got to the details stage.

Loony situation in my opinion but then - what's in it for the Aussies? Not much.

ll

The Aussies could not care less about Kiwi investors .The way they look at is why give a Kiwi a break,no votes in it for them and only giving away money to a Kiwi which is against Aussie nature.Makes net yeild on Aussie shares terrible.
Any way trying to get round it opens you up to big penalties.

[Steve]

If you wanted to be bad, you could just claim the franking credits in your tax return and hope that the IRD doesn't select you for an audit...

[tobo]

If you wanted to be bad, you could just claim the franking credits in your tax return and hope that the IRD doesn't select you for an audit...

Whats the difference between doing that and making up fictitious trades and hoping the IRD doesn't select you...or robbing a bank and hoping the police don't select you.

On a more serious note, I thought that the politicians were too stupid to have released this situation (since it so obviously inequitable I thought it would be an easy decision, in line with ever increasing closer economic relations). The idea that they are aware of it and do nothing just further lowers my respect for these turkeys

[root]

I am also an NZ resident looking to trade on the ASX and this is something I have struggled with. How big a problem is it in reality, are AUS companies more likely to pay dividends fully franked, partially franked or unfranked?

Would an option to re-invest the dividend get aroung the problem? Another idea I had would be selling the shares before they go ex-dividend and then buying them back, not sure of the efficacy of doing this.

[lissica]

Would an option to re-invest the dividend get aroung the problem? Another idea I had would be selling the shares before they go ex-dividend and then buying them back, not sure of the efficacy of doing this.

No, it's still considered a dividend paid.

[CJ]

Another idea I had would be selling the shares before they go ex-dividend and then buying them back, not sure of the efficacy of doing this.

Overnighting. Not sure if it is using by small investors but big corporates do it (in London at least). If you dont want the dividend, you sell to someone before it goes ex and buy it back the next day from them (have agreement to do so).

This was normally be done for tax reasons. ie In a NZ situation say the holder couldn't utilize the IC's due to losses. Sell to a bank as they can use the IC's then buy back the next day. Bank takes a cut but less than the value of the ICs not utilized.

If a trader this will trigger a gain/loss and if not a trader, it may make you one.