Question

Franking a distribution is an important process under the imputation system. Explain, in your own words, what the term “franking” means, and how this system operates in Australia.  

Answer 1

Fraking is a process getting documents stamped. The marked or stamped indicating a legal and stamp duty levied on the document has paid

MEANS:-

that shareholder receive a rebate for the tax paid by the company on profits distributed as dividend. These dividend are descibed as being franked.

Franked dividend have a franking credit attached to them which represents the amount of tax the company has already paid.

A franked dividend is an arrangement in australia that eliminates the double taxation of dividends.

This systerm operates in australia

A franking is a rolling balance account this means the balance of the account rolls over from one from one income year to another.At any time the fraking account can be either in surplus or deficit. The account is surplus if the amount of fraking credit in the account more then the sum of fraking debits.

In australian company tax which is currently 30%.