Credits that arose in your franking account
Show at A Credits that arose in your franking account the total franking credits that arose in the franking account for the period to which this Franking account tax return relates. This amount is the total of all franking credits that arose in the franking account during the income year (or the 12-month period ending on 30 June, for certain late balancing corporate tax entities).
The total amount of franking credits that arose in the franking account in an income year:
- does not include the opening balance of the franking account for the income year, but
- does include a credit that arises at the beginning of the income year as a result of an FDT liability that is incurred at the end of the previous income year.
The amount at A should reflect a ‘tax paid’ basis.
Total franking credits for subsidiary members moving in and out of a consolidated group
When a corporate tax entity becomes a subsidiary member of a consolidated group, it must determine its franking account balance just before the time of entry (the ‘joining time’). If the subsidiary has a deficit balance in its franking account just before the joining time, it is liable to pay FDT. The period during the income year before the joining time or after exit from the consolidated group is a ‘non-membership period’. If there is a liability to pay FDT, the subsidiary must show at A the total franking credits that arose during the non-membership period ending immediately before the joining time.
During the period in which a corporate tax entity is a subsidiary member of a consolidated group (the 'membership period'), its franking account continues to exist but is inoperative. While the subsidiary member’s franking account is inoperative, any franking credits or debits that would have arisen in the subsidiary’s franking account if the subsidiary were not a member are instead attributed to the franking account of the head company. This includes entries relating to a non-membership period but which came about during the membership period.
Where a corporate tax entity has operated outside the group for more than one non-membership period during a particular income year, the amount of franking credits that arose for that year is worked out by calculating the amount of franking credits that arose for each non-membership period. The subsidiary member’s total franking credits received for the income year, shown at A, is the total of the credits that arose in each non-membership period.
The amount shown at A for the period in this Franking account tax return does not necessarily equal the amount shown at J Franking credits item 7 on the Company tax return 2022. Amounts at A relate to all the franking credits that arose in the franking account during the period to which this Franking account tax return relates. By contrast, J item 7 on the company tax return relates only to franking credits that arose because of franked distributions received during the income year.
Last modified: 26 May 2022QC 67986