Use LodgeiT's Share Register tool to record dividends, ensuring compliance with ATO dividend franking rules. Franked dividends attach imputation credits for tax paid by the company; unfranked dividends carry none. Pty Ltd companies may pay franked dividends in their first year without prior credits, but deficits trigger franking deficit tax.
Step-by-Step Process
1. Select "Tools" > "Share Register" (click here to watch "share register")
2. Ensure Dividends is configured in Share Register setup.
3. Click Pay Dividends and choose the class of share.
4. Enter key dates per ATO requirements:
Payment date when dividend is physically paid (shareholder recognition date).
Ex Dividend date is the declaration date.
"Book closure date" is the date accounts cutoff for entitlement calculation.
5. We suggest that you track via automated franking account to avoid deficits.
If there are enough available franking credits, the company can pay franked dividends without incurring franking deficits tax.
Pty Ltd companies can pay franked dividends in their first year of operation WITHOUT having franking credits.
6. Select member(s) (shareholders), proportions auto-apply based on franking %
Note that the selection of the franking % in the previous screen will determine the Franked vs. Unfranked proportions.
**If you wanted to pay an UNFRANKED DIVIDEND, then just ensure to input 0 digit in the "Franking Proportion" field. See below sample image:
7. Apply to generate records, updating shareholder statements with grossed-up amounts and credits.