What is the effect of franking credits?
If the self managed superfund holds Australian shares directly, any tax payable by the fund may be reduced by franking credits on dividends. For example, contributions and earnings taxes can be reduced or offset. If the franking credits exceed the tax payable, the excess amount is refundable. When in pension phase, as no tax is payable on income earned or realised capital gains, the franking credits are refundable in full.
