Any accountants here know what the tax implications are for conduit foreign income (Australian residents)?
I know that foreign residents are exempt.
I have clarified with the company (of which i own shares in) that the profits are taxed in South Africa and attract no Australian tax after being repatriated. As a result, it has minimal franking credits. Dividends paid are 100% unfranked and wholly conduit foreign income. I think Aus and South africa have a tax agreement to prevent double taxation.
So is it correct that unfranked dividends carry a tax credit up to the tax paid but no franked credits.
E.g. My tax bracket is 30% but 34% was the tax the company paid. Hence i still only get a 30% credit but no more.
And that i am still liable for tax if my tax bracket exceeds the tax paid
E.g. My tax bracket is 49% but 34% was the tax the company paid. Hence i have to still pay the difference.
Or is the whole amount of unfranked dividends tax free?
