By Toby Eggleston and Ryan Leslie
The Australian Treasury has released an Exposure Draft of legislation which will further curtail the ability of companies to frank distributions. If enacted in its proposed form it could well impact special dividends paid in conjunction with M&A transactions.
In brief
- Proposed changes to the tax legislation will make dividends funded by equity raises unfrankable.
- The drafting is broader than originally announced in 2016.
- If passed in its current form, the changes could impact the frankability of a special dividend paid in conjunction with an M&A transaction.
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