4th Apr 2018
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Find out if you are owed a tax refund
Author: Olga Galacho
How to find your tax refund

Following the franking credits debate sparked by Opposition Leader Bill Shorten recently, some YourLifeChoices members who own shares have asked how to apply for a tax refund.

Not all listed companies pay tax on dividends they distribute and others pay only some of the tax liability. When the former occurs, then the shareholder receiving the dividend may be liable to pay tax. If the latter occurs, your dividend is described as partially franked and the amount of tax the company has paid is listed as a percentage.

Shareholders who receive fully franked dividends are entitled to offset the tax paid by the company on their behalf against tax liabilities they have. The amount that can be claimed is called the franking credit.

In the case of retirees, most who have an income below a certain threshold will have a personal marginal tax rate of zero. People in that category are not expected to pay any tax and thus are entitled to a refund of tax paid on their dividend by a company on their behalf.

To convert a franking credit into a tax refund, a shareholder needs to lodge a tax return declaring the amount they have received in dividends and any franking credits attached to them. Both these amounts will be recorded in statements the company sends to shareholders twice a year.

If you are not sure whether you have been receiving dividends that have franking credits you can phone the share registry your company is listed with to find out. Make sure you have your shareholder reference number when you call. The number begins with a capital letter and is followed by 10 digits. If you can’t find your number, ask the registry how else you can retrieve your information.

To find out which registry to contact, you can type the company name into this shareregistry.com.au website. Below is a list of the registries of major companies that are popular with Mum and Dad investors:

  • Telstra – Link Market Services

  • Commonwealth Bank and Westpac Bank – Link Market Services

  • Qantas – Qantas Share Registry

  • Woolworths – Computershare

  • BHP Billiton – Computershare

  • David Jones – Computershare

  • Wesfarmers – Computershare

  • Medibank Private – Computershare

  • CSL – Computershare

  • ANZ and National Australia Bank – Computershare 

Registries such as Computershare provide a tax pack for a small fee to help you collate all the information you need about your shareholdings in order to lodge a tax return.

For more information on whether you are eligible to claim a tax refund from franking credits, visit the Australian Taxation Office website.

Have you overlooked claiming a refund of franking credits? Do dividends from shareholdings form a part of your income?

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances. 

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How franking works
Claim credits for extra income
Tax tips for retirees





    COMMENTS

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    Bren
    4th Apr 2018
    11:44am
    Last year the ATO sent my tax refund, which was all franking credits, to my nominated bank account before I had a chance to do my tax return (August 2017). I don't think I will need to fill in a tax return ever (if my situation doesn't change) and I will receive an EFT amount in my account for franking credits about August each year.
    Nerk
    4th Apr 2018
    3:39pm
    Interesting so if you didn't get a chance to lodge a claim what about deductions computer, ink, etc?
    fairplay
    4th Apr 2018
    11:50am
    Re franking credits.... what about those that are retired over 60 and drawing from an allocated pension within an industry fund under the auspices that any and all income is tax free!!
    Does that mean that your earnings will be less as the fund will adjust the return downward to allow for these franking credits or do we have to complete a tax return(told my tax lady last year was to be my last based on No longer working !) Assuming retirees will have less earnings within their Super then perhaps some may consider Super is not really doing what it was intended to do for them and simplify their finances by spending down to the point where they can get the FULL AGE PENSION and not to be at the mercy of the market.What a crazy situation considering we have been led to believe Super is the best way to go.We really need some direction as to how Shorten's proposal will affect peoples personal circumstances, but i'm sure those in the workforce now would think this is a joke, no point being too proactive at this point as the goalposts change too often to plan anything and best to spend now and hope the country is in good shape when we retire and hopefully i will be looked after.Seems the politicians of the day do not have to worry about the future of the country as they will be long gone by the time the next lot just blame those for the disastrous mistakes those politicians of 2018 made ( just a blame game)...Why not have politicians for life , not as many to pay pensions to and have them work to 67 and be accountable like the rest of the population ie bad mistakes = TERMINATION....NO HUGE PAYOUTS at the end, just like the rest of us, they need to accumulate by way of the SG + topping up their super (if they have spare and i am sure they should have).INSTEAD we seem to have developed a system where these buggers breed like flies and at the end ( usually only after working half the time of most) can walk away with a handsome pension for life.... seems like a pretty good deal, just need to not have a conscience !....ALTHOUGH I AM SURE THERE IS THE ODD GOOD ONE WHO CARES !, but just cant figure out how to sort out the mess.Unfortunately we have been on a slippery slope for about 40-50 years , with greed being the main culprit....less jobs as we have allowed these to go offshore to low cost areas, increased homelessness, breakdown in family( increase in domestic violence) and what seems to be the acceptance of many things that would not have been tolerated a lifetime ago, but seems our justice system makes allowances for repeat offenders, probably on the basis we would need to build hundreds of jails to house them, less cost to release and let them remain on the merry-go-round, really quite sad, but am told when you look on a global scale we are doing pretty good.....last bit a tad off track , sorry about that !
    Rae
    4th Apr 2018
    11:59am
    Rather than try to figure out the lies they have told us can you think of one time when they actually told the truth or kept a promise?
    fred
    4th Apr 2018
    12:18pm
    yes , fairplay , Shorten's new policy on taking franking credits off , self funded retirees is a can of worms . Hopefully retirees on allocated pensions will remain tax free but how can anyone trust him when he excludes and directly targets retirees in Self Managed Super Funds from exemption from proposed new regime . Shorten will target anyone with investment property eg Negative gearing , Capital gains 50 % concession relief and then protect the Union super funds
    Shorten is always shouting out about being fair , but he lies and sucks up to the union thugs who fund his election campaigns . Our only chance to preserve our retirement savings is to vote LNP and if you cant understand that then God help you . I urge every retiree to write / phone their local member and shake them up to fight Shorten's thieving tax grab on self funded retirees . and please all those who say self funded retirees are rich, remember we are not costing the government anything and have paid our taxes on our savings before and after investing in super .
    Rosret
    4th Apr 2018
    1:12pm
    I must admit I didn't realise my dividends had been pre-taxed. I have to thank Bill for making me aware of this fact.
    I will most certainly be putting in a tax return in future.
    Old Geezer
    4th Apr 2018
    2:11pm
    Yes fairplay your earnings are likely to be less when under Labor's tax grab as your income is tax free. If you pay no tax they keep your franking credits.
    adbob
    4th Apr 2018
    5:25pm
    @Fred

    "Our only chance to preserve our retirement savings is to vote LNP"

    You can't be serious.

    It was the LNP who recently effectively reneged on partial age pensions for many many Australians by suddenly doubling the assets test clawback rate. That made super savings for a great many people completely worthless.

    It's almost certain to change again because under the current set-up anyone facing a huge clawback as they approach retirement age will simply take early retirement and spend down to the level required to maximise combined age pension/super income - so it has to change - it's completely mad.

    I'm not shilling for the ALP here because they didn't oppose it - although I don't think they would have had the gall to initiate this themselves.

    Conversely Shorten's recent franking credits proposal is half-baked. It's obviously who he wants to target (I hope) - that's well-to-do people with huge super balances (whether in a fund or an SMSF) who live high on the hog without paying a penny in any form of income-related tax.

    Fool that he is he's caught a whole lot of very ordinary people with very modest savings in the crossfire - many of whom would mormally have been his rusted-on supporters - but who may now be having second thoughts. What a clown. Do these people think this stuff up for themselves while they're sat on the bog or something? Surely they have advisers. What a stupid thing to do.

    Or maybe it's just a cynical ploy. Having seen how Hockey and ScoMo got away with slugging ordinary retiress with hardly a murmur from the media or anyone else maybe he thought he'd try the same trick himself.

    We're too soft a target. We should be out in the streets protesting.
    Anonymous
    5th Apr 2018
    7:51am
    Our only hope, as retirees, is to UNITE and protest the attack on us WITH ONE VOICE - and loudly. Also, remind younger Australians that this is about THEIR FUTURE. They will walk in our shoes one day. And their super won't be nearly enough for the majority.

    BOTH parties need to be made to understand that the population will not tolerate their stupidity or evil (whichever it may be!)

    The problem I see is selfishness, and wild ASSUMPTIONS by asses who can't think past ''how much money do I have vs him/her?'' Both parties are playing on that selfishness and stupidity.

    If some pensioners stopped barking about others having more and focused on what's good for the nation as a whole, realizing that what's good for the nation is good for them, they JUST MIGHT be able to see through their green-eyes to recognize that it's BAD FOR THE COUNTRY to discourage local investment AND to punish people for doing what drives national prosperity.

    By all means tax the wealthy fairly. But franking credits are an essential part of the income of low income-earners who are saving the government money by not drawing pensions, or only drawing part pensions. Taking them away will save with one hand and impose cost on the other. Pension costs will rise. Lower paid employees who sensibly invest more than their employer-funded super will have less for retirement and need higher pension support. Australian companies will suffer the loss of investment to foreign entities that are paying higher dividends. Property prices will soar again as people move investments from Australian companies that pay dividends to property investments, because without franking credits, dividends from Aussie companies will frequently be inadequate.

    It's BAD policy, Mr Shorten (and blinded ALP supporters)

    Yes, the LNP is bad news. But for goodness sake STOP ranting about which party is better - because BOTH are a disaster - and focus on THE POLICY.

    What this country needs is a total re-think. We recognize that high taxes can discourage enterprise and slow the economy. We recognize that slow wage growth is bad. We should ALSO recognize that a comfortable retirement is the VERY BEST incentive there is to working hard and planning responsibly, and bashing those who did what is good for the nation to reward those who impose heavy cost on the taxpayer in retirement is BAD POLICY. It will hurt the economy, and ultimately hurt pensioners most. It's just really, really sad that selfish people can't see that, and keep screaming for the blood of SFRs, for no better reason than that they are blinded by envy and swallowing MASSIVE LIES.
    mike
    4th Apr 2018
    1:13pm
    I am one of those idiots who worked very hard all my life and saved for my retirement under then Government guidelines. I didnt smoke or drink or gamble and raised a family. I was then penalised by bastard Hockey who called me a wealthy homeowner ( My home is worth a modest $250000 country cottage ) unlike bastard Hockey who didled the travel allowance to the tune of several lots of $288 pn to pay for a Canberra Mansion that he openly boasted he got through lying and cheating. Now Bastard Turnbul and Bitch Bishop and slimeball Shorten are continually hitting Not the wealthy but the working middle class and retirees and filling their own pockets. After supporting the conservative parties for the last 50 years I will now vote One nation.
    Old Geezer
    4th Apr 2018
    2:06pm
    So what has this to do with the refund of franking credits?
    fred
    4th Apr 2018
    5:09pm
    yes Mike like you , I have had a gutful of them all . All about themselves, the big end of town and unions etc and definitely not in the National interest or workers and retirees interests .
    adbob
    4th Apr 2018
    5:10pm
    Shorten has form on this. When he took over from Chris Bowen as Minister for Financial Services and Superannuation he rolled over to the LNP/Collins Street financial services lobby - that was in Julia Gillard's government - before he backstabbed her. Bowen (a Ruddite ) was at least doing a good job there and was on the verge of freeing people locked into rip-off trailing financial adviser fees in their retail super savings.

    Unfortunately we don't have a proper Labor party - we haven't had one since Hawke and Keating - both economic neocons who hi-jacked it.

    Keating (still revered by some as a financial genuius) was obviously a moron - he couldn't string a sentence together without littering it with "er y'knows" and repeating the last few words. He was just a bully boy who had the rest of the ALP living in fear and he was much loved by those who should have been his political opponents. Hence the ridiculous super/age pension system we have now. It's Keating's model. Take a look at the rest of the developed world for models of fairer ones.

    You don't need to go far. New Zealand has one - and it's survived rule by their centre-right party.

    Look at the silence from the opposition benches when Hockey and ScoMo reneged on Age Pensions altogether for the average middling Australian - benefitting spongers and scroungers iand the very weall-to-do in equal measure by slugging hard-wrking and saving Joe Average. Sadly Joe average doesn't have a lobby/pressure group - doesn't contribute to party funds of either of the major parties (big business usually contributes to both) so Joe Average gets clobbered while the others get the goodies - and having got the goodies they continue to whinge.

    A proper Labor party would re-invent itself and quietly disown that shameful era -a bit like the UK Tories (who are now quite a good way to the left of our ALP) have shed the Thatcher image without actually denouncing her.
    ABI
    4th Apr 2018
    1:20pm
    The ATO has changed the refund process, now being automated.
    As I was told no need for me to do anything, funds went straight in my bank account.
    I don’t know if a general change or in my case being a pensioner and not doing a tax return.
    adbob
    4th Apr 2018
    5:36pm
    They say that and it may well have been their aim - but you shouldn't rely on it. A lot of major companies fail to have their data processed for various reasons so it doesn't appear prefilled on your tax account.

    You need to go in and check each one. It's not difficult or laborious.

    If you're lucky you may well find that they're all there and you don't need to do anything - but any that are missing you need to fill in yourself from the numbers supplied on your dividend advice.

    You can do this even if you have registered as not needing to do a tax return on account of total income being below the stated figure.

    If you have failed to do this for past years you can go back quite a few years and catch up.

    If you're scared of computers and screens etc get someone to help you. I did it for my gf (who has a few years on me) and picked up about $2,000 for not many minute's work.
    Sundays
    4th Apr 2018
    6:39pm
    Otherwise, for those who don’t need to lodge a Tax Return there is a form you can download from ATO website or phone and ask them to send it to you. Refund of Franking Credits Form. Very easy to complete. It’s onky one page using the information from your dividend advice.
    Bren
    4th Apr 2018
    7:57pm
    Nerk : regarding your comment on deductions : as my taxable income is way below the threshold, deductions are of no use to me (but refundable tax offsets are - franking credits).
    fairplay
    4th Apr 2018
    9:49pm
    Just a link i found that may be of interest
    i do not understand all of it , so will ask my fund for some clarification
    https://www.superguide.com.au/smsfs/shorten-retirement-tax-refunds-franking-credits
    Old Geezer
    5th Apr 2018
    3:36pm
    Sorry Bill those wealthy you are targeting just aint going to allow you even a cent for the education of kids.

    I myself just aint going to allow you even a cent either.

    Just looks our thought bubble has made investment in shares on the nose, has made the property bubble even better and more of this money has left the country for better opportunities off shore.

    Well done Bill.
    Blossom
    8th Apr 2018
    1:19pm
    Rosret, I'm not sure that all dividends are pre-taxed.
    Bren, I have always had to apply for the franking credit.
    Bren
    8th Apr 2018
    1:27pm
    Blossom, I have always had to apply until last year when I turned 65. If you are 65 or over yourself and your finances are as straightforward as mine perhaps the ATO will automatically refund your franking credits. They did this for me last year before I had a chance to do my tax return. Since I agreed with their assessment I accepted the money and didn't bother with the tax return.


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