Back to GlossaryView Top Shorted Stocks
Australian Market & Macro
Franking Credits
Definition
Tax credits attached to Australian dividends representing corporate tax already paid. Recipients reduce their personal tax liability by the franking-credit amount. Short sellers must compensate lenders for any franking value missed on the loaned stock — a 'frank' or 'manufactured dividend' adjustment.
Related Terms
Manufactured Dividend
A cash payment a short seller makes to the share lender to compensate for dividends paid during the loan period. ATO rules govern the tax treatment, and the obligation often spikes around the ex-dividend date.
Dividend
A cash distribution from a company to shareholders, usually paid semi-annually for ASX stocks. Most ASX dividends carry franking credits.
See short selling in action
Explore real-time ASIC short position data for ASX stocks.