Refund of franking credit instructions and application for individuals 2012-13

How to obtain this publication

Warning:

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

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You can download these publications in Portable Document Format (PDF):

• Refund of franking credit instructions and application for individuals 2013 (NAT 4105, 1.21MB)
• Application for refund of franking credits for individuals 2013.

To obtain a printed copy of this publication:

• use our automated self-help publications ordering service at any time. You need to know the full title of the publication to use this service
• phone our Publications Distribution Service on 1300 720 092. You can speak to an operator between 8.00am and 6.00pm Monday to Friday. Before you phone, check whether there are other publications you might need; this will save you time and help us. For each publication you order, you need the full title.

What is a refund of franking credits?

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

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What are franking credits?

When you own shares or non-share equity interests in a company or when you invest in a managed fund, you might receive dividend distributions.

Dividends paid to you by Australian companies and some New Zealand companies are taxed under a system known as imputation. The tax paid by the company is allocated (or imputed) to you as franking credits attached to the dividends you receive.

When are franking credits refunded to you?

If the franking credits you receive exceed the tax you have to pay, you can claim this difference back as a tax refund. This is what is known as a refund of excess franking credits.

You may be entitled to a refund of the full amount of franking credits received, even if you don’t normally lodge a tax return.

You can fill in the application yourself following the simple step-by-step instructions, or with help from our free services. If you are not familiar with some of the terms used, see Definitions.

Can you use this application for refund of franking credits?

Warning:

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

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You must tick all the boxes to be able to use this application.

All the statements below relate to the income year 1 July 2012 to 30 June 2013.

If you have franking credits but you were not able to tick all the boxes, you will need to lodge a tax return to claim the benefit of these credits.

Claiming your refund of franking credits

Warning:

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

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What do you do next?

You can apply for your 2013 refund of franking credits any time after 1 July 2013, either by phone or by post. To apply for a refund, fill in one of the applications at the back of this publication. You will need all your dividend and distribution statements for 1 July 2012 to 30 June 2013. The section Completing your application will help you fill in the application.

Before you start, read these frequently asked questions and answers.

Frequently asked questions

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

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For definitions of franking credits, dividend statement and other terms used below, see Definitions.

Can I claim franking credits from previous years?

It is not too late to claim a refund of franking credits you received in the 2001 to 2012 income years. If you have not already claimed these credits, go to ato.gov.au and order an application for the relevant years. On the left of the opening page, click on Find a form or publication; then search for the refund of franking credits form you need. You can only lodge these refund applications for previous years by post.

Do I need to send my dividend or distribution statements to the ATO?

No. Keep your statements with a copy of your application.

According to my final dividend statement for the year ended 30 June 2013, my final dividend payment was made after 30 June 2013. The statement also shows a franking credit. In what year do I claim the franking credit?

You claim a refund of the franking credits (and declare the dividend as income) in the year in which the final dividend was actually paid, as shown in the statement (regardless of the year the statement relates to).

The distribution statement from my managed fund shows capital gains, foreign source income and foreign income tax offsets. Where do I include those amounts?

If you don’t need to lodge a tax return, don’t worry about these amounts even if your statement tells you to include them at a specific item on the tax return. To process your application we need only the figures shown at ‘franked amounts’, ‘unfranked amounts’, ‘franking credit’ or ‘TFN amounts withheld’.

The distribution statement shows an unfranked dividend declared to be conduit foreign income. Where do I include this amount?

Show this amount on your application as an unfranked amount.

Can I use this application to claim a refund for TFN amounts withheld or deducted from interest income?

No. You will need to lodge an income tax return to claim the TFN amounts withheld or deducted from interest income.

I chose to reinvest my dividends. Can I still claim a refund of my franking credits?

Yes.

Can I use this application if I own shares or non-share equity interests in joint names with my spouse?

Yes. If you are eligible, you can use this application, stating only your share of the dividends and franking credits shown on the joint statement. If your spouse is also eligible to claim a refund of franking credits, they must complete a separate application or lodge a tax return, stating only their share of the dividends and franking credits shown on the joint statement.

Will the refund affect my pension entitlement?

No, in most cases it will not affect your pension entitlement. However, if you receive a distribution from a private company or trust, your pension entitlement could be affected.

I own shares in a New Zealand company. Am I entitled to claim all the franking credits in the dividend statement?

Not all New Zealand companies will pay dividends with Australian franking credits. You can only claim a refund of the Australian franking credits on the dividend.

You cannot claim a refund of any New Zealand imputation credits.

If you have paid New Zealand non-resident withholding tax on the dividend, the amount of franking credits that you can claim is reduced by any supplementary dividend.

My dividend statement from a New Zealand company includes a supplementary dividend. Where should I include this amount?

Include this amount as an unfranked dividend. No franking credits are attached to supplementary dividends.

Completing your application

Warning:

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

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The instructions that follow will take you through each part of the application. Tear out one of the applications at the back of this publication and start with item 1 below.

Item 1 Your tax file number (TFN)

Write your TFN on page 1 of your application. If you are not sure of your TFN or need to apply for one, phone us on 13 28 61.

Item 2 Were you an Australian resident for the whole income year?

You must be an Australian resident for tax purposes for the whole period 1 July 2012 to 30 June 2013 to apply for a refund of franking credits.

The standards we use to determine your residency status are not the same as those used by the Department of Immigration and Citizenship. Generally, if you have always lived in Australia or you have come to Australia to live permanently, we consider you to be a resident for tax purposes.

If you need help in deciding whether or not you are an Australian resident for tax purposes, use our Are you a resident? tool or phone us on 13 28 61.

Items 3 to 9 Personal details

Complete all these items accurately to avoid delays in the processing of your application.

If you want to lodge your application for refund of franking credits by phone, the name and address we have for you must be current. If anything has changed or you are unsure what details you last gave us, phone us on 13 28 61 to update or check the details before you lodge your application.

Item 10 Electronic funds transfer (EFT)

Direct refund

Complete your account details even if you have provided them to us before. Joint accounts are acceptable.

Complete the following:

• Bank State Branch (BSB) number. This six digit number identifies the financial institution.
• Account number. This number should not have more than nine characters, and should not include spaces.
• Account name. In most cases, your account name should be what is shown on your bank account records. It should include spaces between each word and between initials. If your account name exceeds 32 characters, provide the first 32 characters only.

Item 11 Dividends

If you received a distribution statement from a managed fund or Australian franking credits from a New Zealand company, print X in the YES box.

If you have more than one dividend or distribution statement, you can use the worksheet to help you calculate the amounts to show at item 11.

At S, T, U and V write your:

• unfranked amount
• franked amount
• franking credit (also known as imputation credit)
• TFN amounts withheld or deducted from dividends (if applicable).

Your dividend or distribution statement should show these amounts.

‘Tax file number amounts withheld from dividends’ are only withheld if you did not provide your TFN to the investment body.

A dividend statement from a New Zealand company will show the amount of Australian franking credits (if any) you can claim.

Total dividend income

Add up the amounts shown at S, T and U on your application and write the total at $ Total dividend income.

If you are 18 years old or older on 30 June 2013 and your total dividend income amount is more than $18,200, or you are under 18 years old on 30 June 2013 and your total dividend amount is more than $416, you cannot use this application. You will need to lodge a tax return to claim your refund of franking credits.

Your declaration

Read, sign and date Your declaration on page 2 of the application.

Instructions for the worksheet

Warning:

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

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If you have more than one dividend or distribution statement, follow these steps to fill in the worksheet and calculate the amounts to show at item 11 on your application.

Step 1

Collect all the statements for dividends you received and for distributions you were entitled to for the period 1 July 2012 to 30 June 2013. Using steps 2 to 4, transfer the information from each statement to the appropriate columns in the worksheet.

Step 2

Print the company or fund name shown on your statement under Company or fund.

Step 3

Write the amount of any unfranked (or supplementary), franked or franking credit amounts in the appropriate columns.

If your dividend is from a New Zealand company, and

• you paid New Zealand non-resident withholding tax on that dividend, and
• that company paid you a supplementary dividend

then you must subtract the amount of that supplementary dividend from the amount of franking credits that you include in the worksheet.

Do not include New Zealand imputation credits in column 4 (only include Australian franking credits).

If your statement does not show the franked and unfranked portions of the dividend, include the total dividend amount in column 3 Franked amount.

Step 4

Write any TFN amounts withheld (or deducted) from dividends in column 5.

Step 5

Add up the amounts in columns 2, 3, 4 and 5 and write the total for each column at Total: S, T, U and V respectively on the worksheet.

Step 6

Print X at the YES box at item 11 on your application, if you have received:

• any dividend distributions from a managed fund, or
• Australian franking credits from a dividend paid by a New Zealand company.

Step 7

Transfer the amounts at S, T and U on your worksheet to S, T and U at item 11 on your application. Do not show cents.

Step 8

Transfer the amount at V on your worksheet to V at item 11 on your application. Show cents.

Worksheet

This worksheet is to help you work out the amounts you need to put on your application. You do not need to send this worksheet to us.

How to lodge your application

Warning:

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

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Once you have completed and signed your application you can lodge it by phone or by post.

Lodging by phone will take you less than seven minutes and we will process applications lodged by phone within 12 business days. We will process applications lodged by post within 50 business days.

Phone lodgment benefits

• The service is available 24 hours a day, seven days a week. To avoid busy periods, phone before midday, after 5.00pm or on weekends.
• It is available from anywhere in Australia.
• Most refunds are issued within 12 business days.
• It takes less than seven minutes to lodge your application.
• However, you cannot use this service to lodge for previous years – only the current 2012–13 financial year.

Stop

Do we have your current name, address and financial account details? If you have changed any of these details or are unsure what details you last gave to the ATO, phone us on 13 28 61 before lodging your application by phone.

Lodging by phone

Check that you satisfy all the conditions before trying to lodge this application by phone.

• Complete your Application for refund of franking credits for individuals 2013 before you phone to lodge.
• Phone the lodgment service on 13 28 65, press 2 and then 1.
• Listen to the questions which are based on your completed application.
• Speak naturally, as in normal conversation. There is no need to slow down.
• Say all the numbers individually, for example, 0, 1, 2, 3, 4. For 0, say ‘zero’ or ‘nought’.
• If you need help with a question, say ‘help’.
• If you need a question repeated, say ‘repeat’.
• If you hear a message saying ‘I’m having trouble getting that’, the system will ask you to try again, or the service might ask you to use your phone keypad instead. Wait for the question to finish, then speak clearly when answering.
• Listen carefully because at certain questions the information you have provided will be read back to you to allow you to confirm it is correct. If you have made a mistake you will be given the opportunity to correct the details.
• If you hang up or have to leave the call because of a problem with the system, the information you have provided will be retained when you return to continue with your lodgment.
• At the end of the call you will be given a receipt number to confirm that your application has been lodged. Write the number in the boxes provided on page 2 of your application, above your signature.
• Your call will be recorded in case we need to refer to it later.
• Wait for the receipt number before you hang up. Do not post your paper application to us, but keep it for your records.

Lodging by post

You can post your application to:

Australian Taxation Office
GPO Box 9845
[insert the name and postcode of your capital city]

For example;

Australian Taxation Office
GPO Box 9845
SYDNEY NSW 2001

How to make a change to your application

Warning:

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

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If you need to change the dividend or distribution details you lodged with us, write to the address provided explaining the change required. Do not lodge another application.

In your letter, include your TFN, your contact details and what needs to be changed. Make sure you sign and date the letter and include the following declaration: I declare that all the information I have given in this letter is true and correct.

If you claim too much franking credit, you might have to repay the extra amount with interest.

If your income has increased, check whether you need to lodge a tax return as a result of the change. If you are unsure, phone 13 28 61.

Definitions

Warning:

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

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Conduit foreign income

Australian corporate entities (that is companies, trusts and partnerships taxed as companies) deriving certain types of foreign income can declare all or a portion of an unfranked dividend to be conduit foreign income. Show any conduit foreign income as an unfranked dividend on your application.

Distribution statement

Managed funds or unit trusts send a distribution statement (also called a taxation statement) to investors. The statement might include unfranked dividends, franked dividends, TFN amounts withheld and franking credits.

Dividend income

If you own shares in a company, you will generally be paid a share of the company’s profits as a dividend.

Dividend statement

Companies send a dividend statement to shareholders (and holders of non-share equity interests) to advise them of the amount of dividends paid to them. It also advises whether the dividends are franked or unfranked, the amount of franking credit, and TFN amounts withheld (if any).

Franked dividend

Franked dividends are paid to shareholders (and holders of non-share equity interests) out of profits on which the company has already paid tax.

Franking credit

A franking credit is your share of tax paid by a company on the profits from which your dividends or distributions are paid. A franking credit can also be referred to as an imputation credit, imputed tax credit, imputed credit, Class C imputation credit, imputation tax credit, Class C imputed credit, Australian franking credit or Australian imputed tax credit at the rate of 30%.

Imputation credit

See Franking credit above.

Managed fund

A managed fund is generally run by an organisation that manages investors’ money through a diversified portfolio for a fee. Managed funds might include investment in any or all of the major asset groups such as cash, bonds, shares and property.

New Zealand imputation credit

New Zealand imputation credits are credits arising under New Zealand’s imputation system. Australian imputation credits are now called franking credits.

We cannot refund your imputation credits but will refund Australian franking credits attached to dividends you receive from a company.

Non-share equity interest

From 1 July 2001, certain interests which are not shares are treated in a similar way to shares for tax law purposes. These interests are called non-share equity interests.

Supplementary dividend

Supplementary dividends from New Zealand companies are treated the same as unfranked dividends.

Tax file number (TFN) amount withheld

TFN amounts withheld are amounts withheld or deducted by the company or managed fund because you did not give them your TFN.

Total dividend income

Total dividend income is the total of your unfranked dividends, franked dividends and franking credits.

Unfranked dividend

Unfranked dividends have had no Australian company tax paid on the profits from which they are paid. If the dividend is unfranked, there is no franking credit.

More information

Warning:

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

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Phone

Phone lodgment 13 28 65

Lodge your application for refund of franking credits by phone 24 hours a day, seven days a week.

Progress of refunds 13 28 65

Check the progress of your refund of franking credits – this can be done by phone, or at ato.gov.au

By phone: This is an automated self-help service available 24 hours a day, seven days a week. You will need to key in your tax file number (TFN) using your phone keypad.

If you sent your application by ordinary post, wait 11 weeks before phoning to check on the progress of your application.

If you lodged your application by phone, wait three weeks before phoning.

On ato.gov.au: Go to ato.gov.au and search for 'Progress of return' to use our Progress of return enquiry tool.

Individual 13 28 61

Individual income tax and general personal tax enquiries, including:

• refund of franking credits
• TFN
• whether you need to lodge a tax return
• request for extra copies of the application for refund of franking credits
• whether you are an Australian resident for tax purposes

Business 13 28 66

Information about business income tax, fringe benefits tax (FBT), fuel tax credits (FTC), goods and services tax (GST), pay as you go (PAYG) and activity statements, including lodgment and payment, accounts and business registration (including Australian business number and tax file number), and dividend and royalty withholding tax.

Superannuation 13 10 20

Other services

If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service (TIS) on 13 14 50.

If you are deaf or have a hearing or speech impairment, phone the ATO through the National Relay Service (NRS) on the numbers listed below, and ask for the ATO number you need:

• TTY users, phone 13 36 77. For ATO 1800 free call numbers, phone 1800 555 677.
• Speak and Listen users, phone 1300 555 727. For ATO 1800 free call numbers, phone 1800 555 727.
• Internet relay users, connect to the NRS at relayservice.com.auExternal Link

Publications

To get publications, taxation rulings, practice statements and forms:

• go to ato.gov.au/publications
• phone 1300 720 092.

Tax Help

Tax Help is a free and confidential service for people on low incomes. People who use Tax Help include seniors, people from non-English speaking backgrounds, people with a disability, Aboriginal people, Torres Strait Islander people, and students.

We train and support this network of community volunteers to help you. Tax Help is available between 1 July and 31 October each year.

If you need assistance with completing your application, there are Tax Help centres throughout Australia. If you want to visit one of the trained volunteers, you need to make an appointment first. When you visit, you will need to bring:

• this publication, Refund of franking credits instructions and application for individuals 2013, and
• all your dividend and distribution statements.

For more information or to find your nearest Tax Help centre, phone 13 28 61.