Does the R&D refundable tax offset generate a franking debit in my franking account?
Generally, a franking debit arises in your entity’s franking account when you receive a refund of income tax which includes a refunded amount from a tax offset. However, special rules ensure that the amount of R&D tax offset refunded is not immediately reduced as a result of the entity becoming liable to franking deficit tax. The franking debit that usually arises when a refund of income tax is received, is effectively deferred in relation to refundable R&D tax offset amounts.
If a debit has been deferred for this reason, a franking credit will not arise as a result of income tax or pay as you go (PAYG) instalments your entity pays until you recover these deferred franking debits.
For more information:
Please consult with your general tax agent to learn how your franking account can affect a potential R&D tax claim.
Courtesy of the ATO