Converting a class A franking account

The conversion involves multiplying the surplus from the class A franking account by 39/61 to arrive at the equivalent tax paid amount.Amount of the class A franking surplus at the end of 30 June 2002 under the 1936 Act times (39 divided by 61)

Example: Conversion of class A franking surplus to tax paid basis

Quality Opals Pty Ltd has a surplus of $6,100 in the class A franking account on 30 June 2002. They have not yet converted to a class C franking account. Quality Opals Pty Ltd will need to convert this amount to a tax paid amount on 1 July 2002. The tax paid amount will be $3,900 ($6,100 x 39/61). ($3,900 being available franking credits).

End of example
    Last modified: 09 Jul 2014QC 17505