§ Rules · Income Tax Assessment Act 1936 (Cth) s 160APHO
The 45-day holding period rule, counted day by day
Worked example: A parcel bought on Monday 2 March 2026
| Acquisition (day 0, excluded from the count) | Mon 2 Mar 2026 |
| Clear days at risk required | 45 (days 1 through 45) |
| Disposal day is also excluded | so day 46 is the boundary |
| Earliest disposal with credits intact | Fri 17 Apr 2026 (acquisition + 46 days) |
Certain preference shares carry a 90-day count instead of 45. Disposals are traced last-in-first-out per parcel (s 160APHI).
Franking credits attach to a dividend only if the shares were held at risk for at least 45 clear days around the ex-dividend date. The acquisition day and the disposal day are both excluded from the count, so the earliest disposal that keeps the credits is acquisition plus 46 days.
How the rule counts
- 01Count starts the day after acquisition: the acquisition day itself is day 0 and does not count.
- 0245 clear days at risk are required; the disposal day is also excluded, which places the earliest credit-safe disposal at acquisition + 46 calendar days.
- 03Disposals are matched to parcels last-in-first-out (s 160APHI), so selling any shares in the company restarts the question for the most recently bought parcel first.
- 04The small-shareholder exemption (s 160APHT) applies to individuals only; an SMSF cannot use it, at any dollar amount.
Sources
- Income Tax Assessment Act 1936 (Cth) s 160APHO (holding period requirement)
- Income Tax Assessment Act 1936 (Cth) s 160APHI (LIFO parcel ordering)
- ATO: franking credits, holding period rule and related payments rule
Live now
Franked tracks every parcel's day count before a trade, not after the annual return. The 45-day rule, tracked before you trade →Start Franked →
Not a licensed financial service. Information only. Nothing on this page is financial, tax, or legal advice.