Claiming franking credits from prior income years
It is not too late to claim a refund of franking credits you received in previous income years. If you have not already claimed these credits, you can order a Refund of franking credits application and instructions for individuals (NAT 4105) for the relevant income years, see Order ATO publications. You can only lodge these refund applications for previous years by post.
Distribution statement
Managed funds or unit trusts send a distribution statement, AMMA statement or taxation statement to investors. The statement might include unfranked dividends, franked dividends, TFN amounts withheld and franking credits.
You should keep your distribution statement with a copy of your application. Don't send a copy of the statement to us.
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).
You should keep your dividend statement with a copy of your application. Don't send a copy of the statement to us.
When to claim a franking credit refund
You claim a refund of the franking credits in the income year the final dividend was paid or credited. This information is shown in the statement (regardless of the year the statement relates to).You also need to declare the dividend as income in the same income year.
Other amounts on your distribution statement from a managed fund
If you don’t need to lodge a tax return, you don’t need to worry about these amounts such as capital gains, foreign source income and foreign income tax offsets even if your statement tells you to include them at a specific question in the tax return. To process your application, we need only the figures shown at ‘franked amounts’, ‘unfranked amounts’, ‘franking credit’ or ‘TFN amounts withheld’.
Conduit foreign income
Australian corporate entities (companies, trusts or partnerships taxed as companies) with certain types of foreign income can declare all or part of an unfranked dividend as conduit foreign income. Show any conduit foreign income as an unfranked dividend in your application.
Unfranked dividend declared to be conduit foreign income on your distribution statement
If your distribution statement shows an unfranked dividend that is declared to be conduit foreign income, show this amount in your application as an unfranked amount.
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.
Refunds for TFN amounts withheld or deducted from interest income
You will need to lodge an income tax return to claim TFN amounts withheld or deducted from interest income.
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 is also known as any of the following:
- imputation credit
- imputation tax credit
- imputed credit
- imputed tax credit
- Australian imputed tax credit
- Australian franking credit
- Class C imputation credit
- Class C imputed credit.
Reinvesting dividends and refund of franking credits
If you reinvest dividends, you can still claim a refund of franking credits.
Shares or non-share equity interests in joint names with your spouse
If you own shares or non-equity shares in joint names and you are eligible, you can use this application. You only state your share of the dividends and franking credits from 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. They should state only their share of the dividends and franking credits shown on the joint statement.
Franking credit refunds and your pension entitlement
In most cases receiving a franking credit refund will not affect your pension entitlement. However, if you receive a distribution from a private company or trust the refund could affect your pension entitlement.
Owning shares in a New Zealand company and claiming franking credits
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 dividends.
You can't 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.
New Zealand imputation credit
New Zealand imputation credits are credits arising under New Zealand’s imputation system. We can't refund your New Zealand imputation credits.
Australian imputation credits are called franking credits. We refund Australian franking credits attached to dividends you receive from a New Zealand company.
Declaring supplementary dividend amounts included from a New Zealand company
If your dividend statement shows a supplementary dividend amount from a New Zealand company, include this amount as an unfranked dividend. No franking credits are attached to supplementary dividends.
Continue to: Instructions to complete your refund of franking credits application
Return to: What is a refund of franking credits?