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Understanding franking credits for shares/managed funds
On this page
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:
- Add the shares/managed fund and choose a 'Profile'. e.g. Australian equities. For more details, see Shares/Managed fund
- You can see the default Optimo assumptions for shares/managed funds on the Optimo Financial Default Assumptions page
- When you have added a particular profile, you can then see the franking credit in the assumptions report at the Solve step and in the Results. For more details, see How to see and edit the assumptions
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
- In the results (using the appropriate report from the table above), find the values for:
- Dividends
- Franking credit
- Calculate total taxable Income: (Dividends) + (Franking credit)
- Calculate Tax:
- For an individual: (marginal tax rate) x (Income)
- For an SMSF: SMSF tax rate (15%) x (Income)
- Franking credit refunded: (Franking credit) - (Tax)