Assessing dividend income, and miniming death tax

The tax rules around dividends, and a strategy for stopping a potential super hit.

Summary: If a dividend is declared in one tax year and paid in another, when should it be recorded as income received?

Key take-out: The Tax Office has specific guidelines on recording income, and on taxing super accounts passed to beneficiaries.

 

Question: In the recent webcast, “The super franking question”, you stated that dividends should be taken up when declared, not paid. It was my understanding that individuals take up dividends on a receipt basis and companies use an earnings basis. Not to confuse the issue, I understand that trust distributions are taken up when declared, not on a paid basis, regardless of the entity. Can you please confirm whether my understanding is correct and on what basis should SMSF use to take up dividends?

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