I don't understand how "dividend washing" works. It is illegal but has been used apparently by SMSF.
How can one sell shares that have gone ex-dividend and "then go straight back in to the market" to buy those shares back on a cum-dividend basis "picking up two sets of dividends and franking credits". I don't get it! I'm just not smart enough to be a successful white collar criminal.Dividend washing occurs when shareholders seek to claim two sets of franking credits, effectively on a single parcel of shares.
For example, an investor holding franking credits in a stock who has held it for 45 days, sells the stock ex-dividend, pocketing the dividend and franking credits. They then go straight back in to the market to buy an equivalent quantity of the stock “cum dividend”, thus picking up two sets of dividends and franking credits.
Read more: http://www.smh.com.au/business/perso...717-zu2fl.html