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Level 9, 360 Queen Street Brisbane, QLD 4000
07 3328 8999
07 3328 8988
mail@cflfinancial.com.au
If you’re a successful and Motivated business owner, and want to set yourself up for retirement, this guide would be perfect for you. My clients who follow these 3 simple steps live with comfort, security and the peace of mind that financial success brings.
If you’re a busy Professional and you feel like you’re not building your wealth fast enough and you want smarter ways to utilise your cash flow, this guide is perfect for you. Clients who have used our strategies have the peace-of-mind knowing they have a ‘game plan’ for financial abundance.
Posted on Apr 12, 2017 by CFL Financial
The Government has announced a new measure in the 2016-17 Mid-Year Economic and Fiscal Outlook to prevent the distribution of franking credits where a distribution to shareholders is funded by particular capital raising activities.
This new measure is intended to address issues raised by the Tax Office’s Taxpayer Alert 2015/2 regarding arrangements used by companies for the purpose of, or for purposes which include, releasing franking credits or streaming dividends to shareholders.
The ATO have been reviewing arrangements with all or most of the following features:
A company with a significant franking credit balance raises new capital from existing or new shareholders, i.e., issuing renounceable rights to shareholders. Shareholders may include large institutional superannuation funds.
The company makes franked distributions to its shareholders, at a similar time to the capital raising and a similar amount of capital is raised. This may occur as a special dividend or through an off-market buy-back of shares, where the dividend forms part of the purchase price of the shares.
Overall, there is minimal net cash inflow to or outflow from the company; the net asset position of the company remains essentially unchanged but their franking account is significantly reduced, and there is minimal impact on the shareholders (except in some cases they may receive refunds of franking credits, and in the case of buy-backs they may also get improved capital gains tax outcomes.)
The new measure is set to apply to distributions made after 12.00pm (AEDT) on 19 December 2016. The measure has not been enacted and is subject to the normal parliamentary process.
If you’re a successful and Motivated business owner, and want to set yourself up for retirement, this guide would be perfect for you. My clients who follow these 3 simple steps live with comfort, security and the peace of mind that financial success brings.
If you’re a busy Professional and you feel like you’re not building your wealth fast enough and you want smarter ways to utilise your cash flow, this guide is perfect for you. Clients who have used our strategies have the peace-of-mind knowing they have a ‘game plan’ for financial abundance.
Email: contact@cflfinancial.com.au
Phone: 07 3328 8988
Fax: 07 3328 8999
Office Location:
Level 15, 10 Market Street,
Brisbane,
QLD 4000
Postal Address:
GPO Box 2468,
Brisbane,
QLD, 4001