Simplified imputation - the franking account

This fact sheet provides information on the changes to the franking account with the introduction of the simplified imputation system. It also contains links to other fact sheets in the series on imputation.

For information on how early balancing corporate tax entities convert their class C franking account to an equivalent tax-paid basis refer to the fact sheet Simplified imputation: consequential amendments for an early balancing corporate tax entity to convert its franking account to a tax paid basis.

Key points

  • The simplified imputation system took effect from 1 July 2002.
  • Entries in the franking account are recorded on a tax-paid basis.
  • The franking account will operate on a rolling balance account.
  • The new rules replicate the former rules relating to franking credits and debits and the times at which they arise.
  • Franking deficit tax will be imposed if a franking account is in deficit at the end of the income year; or at 30 June for certain late balancing corporate tax entities.
  • Franking deficit tax will continue to be creditable against income tax.

Status and changes

This fact sheet replaces a previous fact sheet published on 11 July 2002.

    Last modified: 17 Dec 2015QC 16621