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Franking credits: What a waste

Published on 01 May 18 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The change to the company tax rate was initially a reasonably simple concept. However, over the last 18 months, these changes have become a complex set of rules, requiring companies to assess their eligibility for the lower tax rate on a year-by-year basis. The changes to the company tax rate also have a fl ow-on effect to the imputation rate. This article examines how the new rules will impact the franking credits available for use by companies that have a $10m to $50m turnover. The potential for franking credit wastage lies in the growth of a company’s turnover interacting with the increases to the turnover threshold for access to the lower company tax rate. Following the money, who will be the most signifi cantly impacted by these changes? Is there a solution or are we going to be stuck with wastage of franking credits?

Author profile

Marg Marshall CTA
Marg Marshall, CTA, is a Partner at WLF Accounting & Advisory in Hobart. She has over 25 years experience in tax advisory at a technical level. Marg advises clients of all types from individuals to large, listed entities, specialising particularly in transaction and structuring advice, capital gains tax, not-for-profit tax concessions and deceased estates. She has been a member of the Tasmanian State Council since 2013. Marg is on The Tax Institute’s National Council and is also chair of The Tax Summit Program Committee. She is also a member and past Tasmanian regional councillor of Chartered Accountants Australia and New Zealand. She regularly participates in tax law consultations and often presents for The Tax Institute. - Current at 10 September 2020
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