Dividend Stripping

[jonathanwills]

hello friends. In the stock market I feel that dividend stripping use to buying a stock just to reap the dividend and the franking credit. So I would like to know that Can investors use dividend-stripping as a tax saving tool?

 

[Sinbad]

No.

 

[borga]

I seem to remember an article in the tax law with the purpose to prevent dividend stripping, something about having to ignore a capital loss on the sale of the shares if a large dividend was paid out recently.

edit: I see in some cases the dividend becomes part of the receipt (for tax purposes) you get when you sell the shares, refer to par 43A of the 8th schedule and art 22B of the income tax act.

 

[4cer]

There is a formula that is used for tax when dividend stripping occurs

 

[jonathanwills]

Thanks for giving me such a great ideas. I eager to know more about this. Formula is really worthy to me.