Dividend Imputation and Franking Credits

What is dividend imputation? When shareholders receive dividends, they are essentially treated as having received a distribution of the pre-tax profits of the company. Accordingly, they must include in their assessable income the actual amount of the dividend received plus the amount of company tax paid on that dividend (referred to as the ‘grossed up dividend’, or dividend imputation). However, to ensure the dividend is not taxed twice, (initially in [...]