Converting a class C franking surplus
The conversion involves multiplying the pre-1 July 2002 surplus from the class C franking account by 30/70 to arrive at the equivalent tax paid amount.
Amt of the class C franking surplus x (30/70)
Example: Conversion of class C franking surplus to tax paid basis
At the end of the day on 30 June 2002, Trixie Pty Ltd has a class C franking surplus of $7,000. On 30 June, Trixie Pty Ltd closes off the class C franking account. It opens a new franking account on 1 July 2002 and credits the new franking account with $3,000 ($7,000 x 30/70). ($3,000 being the amount of franking credit available)
End of example