The Australian Taxation Office (ATO) has issued a notice reminding taxpayers of the need to review their franking account if planning to claim the loss carry back tax offset.
Review your franking account for loss carry back
If you are planning to claim the loss carry back tax offset, you need to know the balance of your franking account for the income year you are making a claim.
The franking account balance can limit the amount of loss carry back tax offset that is claimable, so it's important to get it right.
You should review your franking account balance before you lodge your company tax return and make sure you have correctly calculated the opening and closing balance amounts.
When reviewing your franking account, check you have:
- recorded all transactions correctly and there are no missing entries
- reduced franking credits for any deferred debits
- calculated the balance of your account correctly to see if it's in a credit or debit position at the end of the income year
- kept accurate and complete records about all transactions.
If you do identify an error in your franking account balance you should:
- correct the error before you lodge your company tax return for the income year you are making a claim
- provide the corrected opening balance in your company tax return, if the error occurred prior to the start of the income year you are making a claim for.