The 45 Day Rule

Under the 45 day rule applies for larger shareholders if the investor wants to be eligible for franking credits on any franking credits from their dividend. If their total of imputation credits entitlement exceeds $5,000, then they must hold the shares for 45 days + 2 days. This basically means that you can't just buy shares just to get a franking credit and sell them afterwards.

Check these Circumstances

Check these Circumstances, especially if your franking credits may total more than $5,000. (this is not the total amount of dividends, therefore this rule usually applies for those who trade large numbers of shares)

• You buy shares that are under a takeover, and franked dividends are also considered
• Buy stock for the sole purpose of getting frank credits for tax planning
• You sell a share that has recently gone ex-dividend

Just remember that the most important part is that investors need to own the shares for 45 days after the ex-dividend date to be able to claim their franking credits.