Home » E-News » News

Categories

Accountant Allied Health Annuity Asset Finance Asset Planning Asset Protection Asset Protection Strategies Assets Assets and Risks Ato Bas Binding Death Benefit Nominations Binding Financial Agreement Bonds Brexit Budget Budgeting Business Business Registrations Business Support Business Tax Deduction Business Value Capital Gains Tax Capital Protection Catherine Frost Cgt Checklists Commercial Property Community Corporate Trustee Cryptocurrency Death Benefit Nomination Debt Debtors Deceased Estate Depreciation Director Director Id Divorce Economic Update Economy Emily Kermac Employees Estate Planning Executor Fbt Federal Budget Finance Finances Financial Advice Financial Plan Financial Update Franking Credits Government Grants Gst Home Office Hybrid Unit Trust Individual Ownership Information Session Insolvency Insurance Interest Rates Investment Loan Investment Loans Investment Property Investments Janet Kohan Jobkeeper Jobmaker Joint Ownership Ken Burk Land Tax Lending Market Update Mortgage Broking Mygov Negative Gearing Overseas Gifts Parental Leave Paris Financial Pat Mannix Payg Payg Variation Pension Practice Practice Valuations Private Wealth Property Rebecca Mackie Record Keeping Research & Development Retirement Retirement Planning Retirement Savings Salary Sacrifice Scams Self Managed Superannuation Self Managed Superannuation Fund Self Managed Superannuation Fund Borrowing Shares Small Business Smsf Smsf Borrowing Smsf Self Managed Superannuation Fund Steve Wildes Strategic Business Structuring Structures Succession Plan Superannuation Superannuation Fund Tax Tax Benefits for Super Tax Concession Tax Deduction Tax Losses Tax Offset Tax Planning Tax Savings Temporary Full Expensing Tenants in Common Tfe Training Trust Trusts Will Working from Home

The Power of Franking Credits in Super

The Power of Franking Credits in Super

How good are Franking Credits in a Super Fund? Surely Franking Credits in Pensions are NOT fully refundable?

“There is an undeniable tax benefit in holding quality Australian companies that pay out fully franked dividends as part of your self-managed superannuation fund’s portfolio regardless of whether you are still contributing, transitioning to retirement or are fully retired” says our in-house SMSF specialist.

Asset diversification is important and a major consideration required by the ATO, however, it’s also wise to consider the benefits of fully franked income which offers franking credits (or imputation credits). Franking credits received from Australian share dividends can be used to offset tax when an SMSF lodges its tax return at the end of the financial year. Franking credits signify that some or all company tax has already been paid on a dividend before it’s paid to shareholders.

If your SMSF is in pension phase with a tax rate of zero, these franking credits are likely to exceed the tax that is payable in the SMSF. In this case, your SMSF will receive a refund of franking credits at the end of the financial year. Even if your SFMSF is not in pension phase and paying the tax rate of 15%, franking credits can still reduce tax payable and may result in a refund.

Potentially there is a much higher rate of return in your SMSF by investing in publicly listed Australian Shares but don’t take our article words for it, take our written words by engaging our services.

Pat Mannix, Partner, Paris Financial

 


Tags: Franking Credits | Pat Mannix | SMSF | Self Managed Superannuation Fund |