Private ruling: Offsets - franking tax offset
Date of advice: 6 February 2026
Published: 23 March 2026
Ruling period: Years ending 30 June 2026 to 2028

Ruling: Q1: Does subsection 44(1) of the Income Tax Assessment Act 1936 (ITAA 1936) include in the Individuals' assessable incomes dividends paid to them by Company? | A1: Yes. Subsection 44(1) of the ITAA 1936 provides that the assessable income of a resident shareholder includes dividends paid to them. | Q2: Does subsection 207-20(1) of the ITAA 1997 include in the Individuals' assessable incomes the franking credits on dividends paid to them by Company? | A2: Yes, subject to Subdivisions 207-C, 207-D, 207-E and 207-F, pursuant to subsection 207-15(3) of the ITAA 1997. Subsection 207-20(1) provides that the assessable income of the receiving entity of a franked distribution includes the franking credit on the distribution. | Q3: Does subsection 207-20(2) of the ITAA 1997 entitle the Individuals to a tax offset equal to the franking credit on dividends paid to them by Company? | A3: Yes, subject to Subdivisions 207-C, 207-D, 207-E and 207-F, pursuant to subsection 207-15(3) of the ITAA 1997. Subsection 207-20(2) provides that the receiving entity of a franked distribution is entitled to a tax offset equal to the franking credit on the distribution.

Relevant facts and circumstances: The Individuals hold shares in Company. Company pays franked dividends. All entities are Australian tax residents.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 44(1) | Income Tax Assessment Act 1936 subdivision 207-C | Income Tax Assessment Act 1936 subdivision 207-D | Income Tax Assessment Act 1936 subdivision 207-E | Income Tax Assessment Act 1936 subdivision 207-F | Income Tax Assessment Act 1997 subsection 207-15(3) | Income Tax Assessment Act 1997 section 207-20