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Understanding franking credits for shares/managed funds

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How to find the franking credit level used in the analysis

On Shares/managed funds assets, the level of franking credit is filled in based on the 'Profile' you have selected:

How to find franking credits in the results

In the reporting, Pathfinder accounts for franking credits in the initial cash flows, rather than refunding them at tax time. Although the order of the transactions is different, the end result is the same.

To see the franking credits, go to the Detailed reports sub-menu (on the Results step on the top menu), then choose one of the reports on the left menu, depending on who owns the investment and how much detail you want:



OWNER



Total investment owned by individual(s)

An individual's share (if jointly owned)

Owned by an SMSF

LEVEL OF DETAIL

Summary of Income and franking credit amounts

Consolidated > Cash flows (detailed)

(Individual name) > Cash flows (detailed)

(SMSF name) > Transaction account (detailed)

Calculations for income and franking credit amounts

Consolidated > Assets and loans > (shares/managed fund name) > Investment - (shares/managed fund name) > Distribution

(Individual name) > Assets and loans > (shares/managed fund name) > Investment - (shares/managed fund name) > Distribution

(SMSF name) > Assets and loans > (shares/managed fund name) > Investment - (shares/managed fund name) > Distribution

For more details about reading the results, see Shares/managed fund results.

How to calculate the tax refund from franking credits

  1. In the results (using the appropriate report from the table above), find the values for:

    1. Dividends

    2. Franking credit

  2. Calculate total taxable Income: (Dividends) + (Franking credit)

  3. Calculate Tax:

    1. For an individual: (marginal tax rate) x (Income)

    2. For an SMSF: SMSF tax rate (15%) x (Income)

  4. Franking credit refunded: (Franking credit)  - (Tax)

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