Illustration: If your trust entity received Franking Credits in prior years but was unable to claim them due to tax losses (resulting in unclaimed franking credits), you may need to record those prior year franking credits correctly when preparing the trust tax return.
Solution: When the Franking Credit is declared from a trust entity, you can add prior unclaimed Franking Credits by including a worksheet in the Trust section of the tax form. This allows the correct recording of the franking credits carried forward from previous years.
Reference and Further Reading: The Australian Tax Office (ATO) provides detailed guidance on franking tax offsets and the effect on losses for corporate tax entities, which can be applied for trusts as well. This includes rules on how losses affect the ability to utilize franking credits and how prior year losses may need to be accounted for when claiming franking tax offsets: ATO - Utilising Franking Tax Offsets and Effect on Losses