• ## Section C - Significant variation in benchmark franking percentage

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

### Franking period

Generally, a franking period for a corporate tax entity that is a private company is the same as its income year.

For corporate tax entities that are not private companies there are generally two franking periods in an income year. The first franking period is the first six months beginning at the start of the entity's income year and the second franking period will be the remainder of the income year.

For more information on the franking period rules refer to the fact sheets:

End of further information

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

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 the following amount:

 Number of franking periods starting immediately after the last franking period in which a frankable distribution was made (the last relevant franking period) and ending at the end of the current franking period X 20 percentage points

For a corporate tax entity that makes a frankable distribution in every franking period, the effect of the above formula is that a significant variation will occur where the benchmark franking percentage increases or decreases between franking periods by more than 20 percentage points.

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.

Note:
For the purposes of recording the benchmark franking percentage at 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.

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.

End of attention
 Example 6Corporate tax entity with two franking periods XYZ Ltd, a public company, has an income year which started on 1 July 2004 and ended on 30 June 2005. Its franking periods and benchmark franking percentage for the year ended 30 June 2005 were: Franking period Benchmark franking percentage Franking period 1 1 July 2004 to 31 December 2004 50.455 Franking period 2 1 January 2005 to 30 June 2005 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 Franking period A DD MM Year DD MM Year Benchmark franking percentage 0 1 0 7 2 0 0 4 3 1 12 2 0 0 4 G 5 0 . 4 6 Franking period B DD MM Year DD MM Year 0 1 0 1 2 0 0 5 3 0 06 2 0 0 5 H 1 0 0 . 0 0
 Example 7Private company ABC Pty Ltd is a private company that has an income year from 1 July 2004 to 30 June 2005. 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 2003 to 30 June 2004. During the 2003-04 income year ABC Pty Ltd's benchmark franking percentage was 60%. The company's second franking period is 1 July 2004 to 30 June 2005. 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 2004-05 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 Franking period A DD MM Year DD MM Year Benchmark franking percentage 0 1 0 7 2 0 0 3 3 0 0 6 2 0 0 4 G 6 0 . 0 0 Franking period B DD MM Year DD MM Year 0 1 0 7 2 0 0 4 3 0 0 6 2 0 0 5 H 3 0 . 0 0

For more information on the benchmark franking percentage and the disclosure rule, see the fact sheets:

End of further information