Q: How do we manage the refund of franking credits?
A: Franking credits are “refunded” when you lodge your SMSF’s annual return to the ATO. They act as a tax offset (or rebate) – reducing any tax you may have to pay if in accumulation mode, or if in pension mode, triggering a rebate from the ATO.
If you have a lot of franking credits, there is a pretty compelling reason to lodge your annual return. The earlier it is lodged, the earlier you get the money back. As most funds use an accountant and then have to get the fund audited, ask the accountant to work to your timetable.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
Also in the Switzer Super Report:
- Charlie Aitken: CBA – a contrarian’s play?
- James Dunn: Small-cap options – WAM and Mirrabooka
- Ron Bewley: Asciano and Downer EDI the picks of industrials
- Margaret Lomas: Seven property essentials for the New Year
- Fundie’s Favourite: Platypus Asset Management on Sirtex (SRX)
