Why franking credits are a powerful bonus for ASX investors
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Franking credits might not sound exciting at first glance, but for many Australian investors, they’re a hidden gem. If you’re receiving dividends from ASX companies, there’s a good chance you’re also benefiting from franking credits without even realising their full value.
Understanding the franking credit advantage
When an Australian company earns a profit, it pays corporate tax—typically 30%—before distributing dividends to shareholders. Franking credits, also known as imputation credits, reflect this tax that has already been paid.
The benefit? These credits are passed on to shareholders, helping to reduce the income tax they would otherwise owe on their dividend income. It’s a system designed to…
