Income tax 2020

The Impact of Australia's income tax system on company ownership structure

Source: Australian Tax Forum Journal Article

Published Date: 1 Mar 2020


This study examines the links between investor residency, tax status and the corporate ownership structure of Australian listed companies. We find that there is a preference by resident individuals, corporate companies and superannuation funds to hold a ignificantly higher proportion of shares in companies that pay fully franked dividends, relative to other companies. Furthermore, our results show that non-resident investors, in general, hold a significantly higher proportion of shares in companies that pay either unfranked or partially franked dividends, relative to other companies. Finally, there is some evidence that resident individual investors hold a significantly higher proportion of shares in capital appreciating, as opposed to dividend paying, companies, which is consistent with resident individuals seeking to utilise the tax concessions they are afforded on long-term capital gains.

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Income tax 2020

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