• Was there a significant variation in benchmark franking percentage between franking periods?

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Where a corporate tax entity has a significant variation in its benchmark franking percentage between franking periods it has an obligation to disclose this information to the Commissioner. A significant variation will occur where the benchmark franking percentage for the current franking period has increased or decreased by more than 20 percentage points from the last franking period in which a frankable distribution was made (the 'last relevant franking period').

    Examples 6 and 7 will help you to work out if there was a significant variation in your entity's benchmark franking percentage between franking periods.

    If there was a significant variation, print X in the yes box at Was there a significant variation in benchmark franking percentage between franking periods? on the franking account tax return and complete the rest of Section C.

    Attention

    Note
    For the purposes of recording the Benchmark franking percentage, (labels G to J), the value stated should be worked out to two decimal places, rounding up if the third decimal place is 5 or more.

    End of attention

    If there was no significant variation, print X in the no box at Was there a significant variation in benchmark franking percentage between franking periods? You do not have to complete the rest of Section C.

    Example 6
    Corporate tax entity with two franking periods

    XYZ Ltd, a public company, has an income year which started on 1 July 2003 and ended on 30 June 2004. Its franking periods and benchmark franking percentage for the year ended 30 June 2004 were:

    Franking period

    Benchmark franking percentage

    Franking period 1

    1 July 2003 to 31 December 2003

    50.455

    Franking period 2

    1 January 2004 to 30 June 2004

    100.000

    Franking period 1 is the last relevant franking period and franking period 2 is the 'current franking period'.

    The entity's franking percentage for franking period 2 is 100%. This is an increase in the benchmark franking percentage for franking period 1 by an amount that is greater than 20 percentage points, resulting in a significant variation in the benchmark franking percentage. XYZ Ltd has an obligation to disclose this information on the franking account tax return. It would print X in the yes box at Was there a significant variation in benchmark franking percentage between franking periods? and complete the Benchmark franking period boxes as follows:

    Benchmark franking period

    Benchmark franking percentages

    Franking period A

    01 .07 .2003 to 31 .12 .2003

    G   50.46

    Franking period B

    01 .01 .2004 to 30 .06 .2004

    H  100.00

    Example 7
    Private company

    ABC Pty Ltd is a private company that has an income year from 1 July 2003 to 30 June 2004. A private company generally has the same franking period as its income year therefore ABC Pty Ltd's first franking period was from 1 July 2002 to 30 June 2003. During the 2002-03 income year ABC Pty Ltd's benchmark franking percentage was 60%.

    The company's second franking period is 1 July 1003 to 30 June 2004. During this income year ABC Pty Ltd's benchmark franking percentage was 30%. ABC Pty Ltd would have to complete Section C in the franking account tax return as its benchmark franking percentage decreased by more than 20 percentage points in the franking period for the 2003-04 income year. ABC Pty Ltd would print X in the yes box at Was there a significant variation in benchmark franking percentage between franking periods? and complete the Benchmark franking period boxes as follows:

    Benchmark franking period

    Benchmark franking percentages

    Franking period A

    01 .07 .2002 to 30 .06 .2003

    G   60.00

    Franking period B

    01 .07 .2003 to 30 .06 .2004

    H   30.00

    For more information on the benchmark franking percentage and the disclosure rule refer to the fact sheets:

    These are available on our website.

    Last modified: 18 Sep 2008QC 17477