Simplified imputation: franking deficit tax liability for late balancing corporate tax entities

In this fact sheet you will find an explanation of:

• the transitional rules for a late balancing corporate tax entity that may have a franking deficit tax (FDT) liability at the end of its 2001-2002 income year, and
• the ongoing option for certain late balancing corporate tax entities to continue to have their FDT liability determined on a 30 June basis.

This fact sheet also contains links to other fact sheets in the series on imputation.

Key points

• The simplified imputation system took effect from 1 July 2002 and changes the mechanics of the former imputation system but generally achieves the same outcome as the former system.
• A late balancing corporate tax entity will not have any liability to pay FDT if its franking account is in deficit at the end of its 2001-2002 income year. Instead, this deficit balance may be carried forward to the start of its 2002-2003 income year.
• A late balancing corporate tax entity will have the option to choose to continue to have its FDT liability determined on a 30 June basis, rather than at the end of its income year.
• For more information on FDT generally, see Simplified imputation: the franking account.