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Traps for Dividends | 2023 Gotax

July 24, 2023

Be aware of this Dividend Trap

The dividend trap to watch out for is the holding period rule.

This rule requires you to continuously hold shares ‘at risk’ for at least 45 days (90 days for certain preference shares) in order to be eligible for the franking tax offset. If you sell your shares or enter into an arrangement to reduce your risk of making a loss on them within this period, you may not be entitled to claim the franking credits attached to your dividends. It's important to keep this rule in mind when buying and selling shares.

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