E1, E2, E3 and E4 - E Refundable tax offsets questions

If the SMSF is entitled to any refundable tax offsets, the offsets reduce any remaining tax at T3 Subtotal. If the amount of refundable tax offsets exceeds the remaining tax at T3, show the excess at I Tax offset refunds. If the amount of refundable tax offsets is less than the remaining tax at T3 the shortfall becomes the tax payable amount at T5.

E1 Complying fund’s franking credits tax offset

For details on entitlement to a franking credits tax offset, see Entitlement to franking credits tax offset.

Is the SMSF entitled to a complying fund's franking credits tax offset?

No	Leave E1 blank. Go to E2.
Yes	Read on.

Write the franking credits tax offsets at E1.

You must also include the franking credits as income at the appropriate question in section B.

Include at E1 Australian franking credits that are attached to:

• dividends and non-share dividends including where they are exempt current pension income
• a New Zealand franking company's        
  • franked non-share dividends, and
  • assessable franked dividends.

Do not include:

• franking credits if the SMSF is non-complying (include these at C2 rebates and tax offsets)
• credits that you included at C1 Foreign income tax offset
• franking credits attributable to a dividend that is excluded from assessable income because family trust distribution tax has been paid
• New Zealand imputation credits (an Australian resident cannot claim New Zealand imputation credits).

Legislation

Section 67-25 and Division 207 of the Income Tax Assessment Act 1997External Link

E2 No-TFN tax offset

An SMSF is entitled to a no-TFN tax offset in 2018–19 if:

• it was required to pay extra tax on no-TFN-quoted contributions in any of the previous three income years, and
• the no-TFN-quoted contributions were for a member who gave their TFN to the SMSF for the first time in 2018–19.

Is the SMSF entitled to a no-TFN tax offset?

No	Leave E2 blank. Go to E3.
Yes	Read on.

Write the no-TFN tax offset at E2.

The amount of no-TFN tax offset that the SMSF can claim is the total of the additional no-TFN-quoted contributions tax (see J Tax on no-TFN-quoted contributions) that the SMSF was required to pay:

• in any of the three previous income years
• for members who gave their TFN to the SMSF for the first time in 2018–19.

Because SMSF members are generally either trustees of the SMSF, or directors of a corporate trustee, it is very rare for an SMSF to pay no-TFN-quoted contributions tax, and therefore very rare for SMSFs to be entitled to a no-TFN tax offset. Penalties may apply if you claim a no-TFN tax offset that the SMSF is not entitled to.

Legislation

Section 67-23 and Subdivision 295-J of the Income Tax Assessment Act 1997External Link.

E3 National rental affordability scheme tax offset

Is the SMSF entitled to a national rental affordability scheme (NRAS) tax offset?

No	Leave E3 blank. Go to E4.
Yes	Read on.

Write the NRAS tax offset at E3.

The refundable tax offset is only available when the Secretary of the Department of Social Services has issued a certificate under the NRAS. In order to claim the tax offset in the 2018–19 SMSF annual return, the NRAS certificate must relate to the NRAS year 1 May 2018 to 30 April 2019.

For more information, see:

• National rental affordability scheme – taxation issues
• Section 67-23 and Division 380 of the Income Tax Assessment Act 1997.

E4 Exploration credit tax offset

Is the SMSF entitled to an exploration credit tax offset?

No	Leave E4 blank. Go to E.
Yes	Read on.

Write the exploration credit tax offset at E4.

An SMSF may be entitled to a tax offset for exploration credits received during the income year if it was an Australian resident for the whole of the income year.

The amount of the tax offset is the total value of exploration credits the SMSF received in the income year. However, special rules may apply where the SMSF has received exploration credits from a partnership or a trust.

For more information, see:

• Exploration Development Incentive
• Division 418 of the Income Tax Assessment Act 1997External Link.

E Refundable tax offsets

Write at E the total of:

• E1 Complying fund's franking credits tax offset
• E2 No-TFN tax offset
• E3 National rental affordability scheme tax offset, and
• E4 Exploration credit tax offset.

The tax offsets reduce the tax that remains at T3 Subtotal. If the amount of refundable tax offsets at E:

• is less than the tax at T3, the shortfall becomes the SMSF's tax payable amount at T5 Tax payable
• is greater than the tax at T3, show the excess at I Tax offset refunds.

Continue to: T5 Tax payable