Your franking tax offset



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

End of attention

If you are paid or credited fully or partly franked dividends, or non-share dividends - that is, they carry franking credits for which you are entitled to claim franking tax offsets - your assessable income includes both the amount of the dividends you were paid or credited and the amount of franking credits attached to the dividends. You must include both amounts when you lodge your tax return - tax is payable at your applicable tax rate on these amounts.

If the franking credit is included in your assessable income at U item 11, you are entitled to a franking tax offset equal to the amount included in your income. It is not necessary for you to claim the tax offset. It will appear on your notice of assessment.

11 Dividends
If you are a non-resident make sure you have printed your country of residence on page 1 of your tax return.

Unfranked amount



Franked amount



Franking credit



Tax file number amounts withheld from dividends







The franking tax offset can be used to reduce your tax liability from all forms of income, not just dividends, and from taxable net capital gains. Example 4 shows you how this works.

Before 1 July 2000 your franking tax offset could not create a refund. If you had any remaining franking tax offset amount available after your tax liability had been reduced to zero, it was disregarded and could not be refunded. However, from 1 July 2000 any excess franking tax offset amount is refunded to eligible resident individuals, after any income tax and Medicare levy liabilities have been met.

Example 5: Impact of franking tax offsets


Tax payable on taxable income


less other tax offsets


Net tax payable


plus Medicare levy




less franking tax offset


Refund (of excess franking credits)


Amounts are for illustrative purposes only.

Claiming your franking tax offset when you do not need to lodge a tax return

If you are eligible to claim a franking tax offset for 2009-10 but you are not otherwise required to lodge a tax return, you should read the publication Refund of franking credits instructions and application for individuals (NAT 4105). If you need further information phone the Individual Infoline on 13 28 61.

Last modified: 29 Jun 2010QC 27989