Franking Credit Refunds

Do you hold shares in any Australian companies? Perhaps a family member does? A common issue I regularly come across is where investors are unaware they are missing out on the return of their unclaimed franking credits (also known as imputation credits), which can often be in the thousands of dollars.

I have experienced numerous examples of individuals who have a number of years of unclaimed franking credits available to be refunded by the Australian Taxation Office.

A franking credit is simply a tax credit attached to a dividend payment. This credit is for the tax an Australian company has already paid on its profit, before paying the profit to a shareholder in the form of a dividend. When these dividends are paid with this attached credit, they are referred to as “franked dividends”.

The situation where there are unclaimed franking credits usually arises when an individual has a reached a point in time when their personal circumstances no longer require them to lodge an annual income tax return. However, if an investment in Australian shares has been maintained, either directly or indirectly via an investment trust or fund, it is likely there are outstanding franking credits that can be claimed. Not having lodged tax returns over preceding years does not cancel an individual’s eligibility to claim these refunds.

If you (or someone you know) do not lodge tax returns but have an investment in Australian shares or an investment trust (managed fund) with Australian share exposure, I encourage you to get in touch with us to review your situation. You may be surprised what is available to be refunded!