Legislation changes. It always has and it always will. Get over it I say. It is time to let our inventive minds think of elegant solutions to legislation changes.
As you may or may not know, the Australian Labor Party has advised that when it next gets into power it will change the legislation on franking credit refunds.
In its simplest form, this new legislation can be explained thus:
Under the Labor proposal, franking credits (company tax already paid on dividends) can still be used to reduce your tax payable, but if no tax is payable, excess franking credits will not be able to be refunded to you.
Blogs, newspapers, forums and rallies have been yelling very loudly about this proposed legislation change. I personally think it is iniquitous, but that is besides the point as there are many legislation changes that I believe to be iniquitous, not just this one.
So, instead of belly-aching, perhaps think about some elegant solutions to soak up all your potentially unused franking credits. One possible solution is to buy dividend growth shares that are either not franked or only partially franked and add these to your current portfolio.
Here is a list of companies that offer dividend growth and have either NO dividend franking or are only PARTIALLY franked. This list is only an example, there are many more companies that have good dividend growth and are not franked or are partially franked.
|SKI||Spark Infrastructure Group|
|GOZ||Growthpoint Properties Australia|
|AVN||Aventus Retail Property Fund|
|VVR||Viva Energy REIT|
|CMA||Centuria Metropolitan REIT|
|CTD||Corporate Travel Management|
|TWE||Treasury Wine Estates|
|MFF||MFF Capital Investments|
As I am not a financial adviser and this blog post is not advice - always do your own research :-)
Such research will create changes that will respect our future selves.