Free tool · statute cited
The 45-day rule, checked per parcel
Franking credits stay with a parcel only when it is held at risk for at least 45 clear days around the ex-dividend date. An SMSF gets no $5,000 small-shareholder exemption, so the rule bites on every franked parcel, at any size. Enter an acquisition date to see the earliest date you can sell and keep the credits.
- Earliest disposal with credits intact
- Enter an acquisition date
The 45-day rule counts clear days, not counting the day of acquisition or the day of disposal, and the parcel must be held at risk (no hedging) with the ex-dividend date inside that holding. An SMSF does not get the individual $5,000 small-shareholder exemption, so the rule applies to every franked parcel.
General information only, not the fund's assessment. Source: ITAA 1936 s 160APHO. Not a licensed financial service.
Why this trips up SMSFs
Most retail shareholders never meet the rule, because the $5,000 small-shareholder exemption lets an individual ignore it. An SMSF has no such exemption. Sell a parcel a few days early around a dividend and the franking credits on that dividend are gone, and it is usually discovered at audit time, months after the trade. Tracking the 45-day window per parcel across a whole fund is the job SMSF Core does.
Common questions about the 45-day rule
- What is the 45-day holding rule for franking credits?
- To claim franking credits on a dividend, the shares must be held at risk for at least 45 clear days, not counting the day of acquisition or the day of disposal, with the ex-dividend date inside that holding period. The rule is in ITAA 1936 s 160APHO.
- Do SMSFs get the $5,000 small-shareholder exemption?
- No. The $5,000 small-shareholder exemption applies to individuals, not to SMSFs. So the 45-day holding rule applies to every franked parcel an SMSF holds, at any size.
- How are the 45 days counted?
- As clear days: the day of acquisition and the day of disposal are both excluded. So a parcel acquired and disposed 46 calendar days apart has been held for 45 clear days.
- When can I sell and keep the franking credits?
- The earliest disposal that keeps the credits is the acquisition date plus 46 days, which gives the 45 clear days the rule requires, provided the ex-dividend date falls within the holding and the parcel is held at risk.
Not a licensed financial service. Information only. Source: ITAA 1936 s 160APHO.