UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21357
---------

Franklin Templeton Limited Duration Income Trust
------------------------------------------------
(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906 (Address of
principal executive offices) (Zip code)

Murray L. Simpson, One Franklin Parkway, San Mateo, CA 94403-1906
-----------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: (650) 312-2000
--------------

Date of fiscal year end: 3/31
----

Date of reporting period: 9/30/03
-------

Item 1. Reports to Stockholders.

SEPTEMBER 30, 2003

[GRAPHIC OMITTED]

SEMIANNUAL REPORT AND SHAREHOLDER INFORMATION

INCOME

FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS

FRANKLIN Templeton Mutual Series

Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager structure combines the specialized
expertise of three world-class investment management groups--Franklin, Templeton
and Mutual Series.

SPECIALIZED EXPERTISE

Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.

FRANKLIN. Founded in 1947, Franklin is a leader in tax-free investing and a
driving force in fixed income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity investing.

TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in
1954, launched what has become the industry's oldest global fund. Today, with
research offices in over 25 countries, they offer investors the broadest global
reach in the industry.

MUTUAL SERIES. Established in 1949, Mutual Series is dedicated to a unique style
of value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.

TRUE DIVERSIFICATION

Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.

RELIABILITY YOU CAN TRUST

At Franklin Templeton Investments, we seek to consistently provide investors
with exceptional risk-adjusted returns over the long term, as well as the
reliable account services that have helped us become one of the most trusted
names in financial services.

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

[GRAPHIC OMITTED]

Not part of the semiannual report

Contents

SEMIANNUAL REPORT

Franklin Templeton Limited Duration
Income Trust ........................... 1

Performance Summary .................... 6

Dividend Reinvestment Plan ............. 7

Financial Highlights and
Statement of Investments ............... 10

Financial Statements ................... 16

Notes to Financial Statements .......... 19

Proxy Voting Policies
and Procedures ......................... 24

Semiannual Report

Franklin Templeton
Limited Duration Income Trust

YOUR FUND'S GOALS AND PRIMARY INVESTMENTS: Franklin Templeton Limited Duration
Income Trust seeks to provide high, current income, with a secondary objective
of capital appreciation to the extent possible, through a portfolio consisting
primarily of high yield corporate bonds, floating rate bank loans and mortgage-
and other asset-backed securities.

Dear Shareholder:

We are pleased to bring you Franklin Templeton Limited Duration Income Trust's
first semiannual report covering the period from the Fund's commencement of
operations on August 27, 2003, through September 30, 2003.

PERFORMANCE OVERVIEW

Franklin Templeton Limited Duration Income Trust posted cumulative total returns
of +1.40% based on net asset value and -0.27% based on market price from the
Fund's commencement of operations on August 27, 2003, through September 30,
2003, as shown in the Performance Summary on page 6. The net asset value rose
from $14.33 per share on August 27, 2003, to $14.53 at period-end, and the
market price decreased from $15.00 to $14.96 over the same period.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND COMPLETE LEGAL
TITLES OF ALL PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF
INVESTMENTS (SOI). THE SOI BEGINS ON PAGE 11.

Semiannual Report | 1

[GRAPHIC OMITTED]
Portfolio Breakdown
Based on Total Net Assets as of 9/30/03
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Mortgage- & Other Asset-Backed Securities 42.6%
High Yield Corporate Bonds 39.4%
Floating Rate Loans 16.2%
Short-Term Investments & Other Net Assets 1.8%

ECONOMIC AND MARKET OVERVIEW

Continuing a downward trend that began in 2000, the 10-year Treasury note's
yield fell to 3.11% during June 2003, the lowest level in more than 45 years.
The decline in interest rates had a positive impact on the domestic economy as
lower interest rates allowed both consumers and businesses to transact at
reduced costs. For consumers, historically low mortgage rates enabled many
homeowners to refinance their mortgages, as refinancing applications reached
their highest levels on record. Additionally, rising home values and
refinancings improved many consumers' net worth and allowed them to continue
spending. In fact, retail sales grew 7.5% on a year-over-year basis as of
September 2003, helping to drive overall economic growth.

With regard to businesses, many companies took advantage of the lower interest
rate environment to refinance outstanding debt at more attractive levels,
helping their liquidity and setting the stage for improving overall business
conditions. Moreover, the boom in productivity experienced since 2001 allowed
many companies to achieve greater output per worker, boosting corporate profits.

However, by period-end, yields rose sharply from their June 2003 low, with the
10-year Treasury note ending September 2003 at 3.96%, after reaching an
inter-period high of 4.61% in early September. The rise in intermediate- and
longer-term interest

2 | Semiannual Report

rates was driven by a combination of increased optimism for a sustained economic
recovery, which could put upward pressure on the currently benign inflation
level, and the selling of Treasury securities by institutional mortgage
investors as they sought to manage the overall durations, or interest rate
sensitivity, of their portfolios.

INVESTMENT STRATEGY

We seek to maintain a limited duration, or interest rate sensitivity, to
moderate the impact that rising interest rates might have on the Fund's fixed
income portfolio. We invest in a diversified mix of fixed income securities,
primarily high yield corpo-rate bonds, senior secured floating rate bank loans,
and mortgage- and other asset-backed securities. Our "top-down" analysis of
macroeconomic trends combined with a "bottom-up" fundamental analysis of market
sectors, industries and issuers drives our investment process. Within the
corporate bond and bank loan sectors, we seek securities trading at reasonable
valuations from issuers with characteristics such as strong market positions,
stable cash flows, reasonable capital structures, supportive asset values,
strong sponsorship and improving credit fundamentals. In the mortgage- and other
asset-backed securities sector, we look to capture an attractive income stream
and total return through our proprietary analysis of security prepayment
assumptions, pricing inefficiencies, and underlying collateral characteristics.

The Fund intends to offer preferred shares of beneficial interest representing
approximately 33% of the Fund's total assets. That transaction will give rise to
a form of leverage. By using leverage, we would seek to obtain a higher return
for holders of common shares than if we did not use leverage.

MANAGER'S DISCUSSION

On September 30, 2003, the Fund had $371.8 million in total net assets. Since
the Fund's commencement of operations on August 27, 2003, we have invested in
three primary asset categories--high yield corporate bonds, senior floating rate
bank loans, and mortgage- and other asset-backed securities.

In the high yield sector, a combination of improving credit fundamentals and
declining default rates, a manageable level of new-issue supply, and security
valuations that we believe were reasonable compared with longer-term averages
led to relatively strong returns. We were able to invest in many high yield
issues as the

Semiannual Report | 3

period began, and the Fund benefited from a subsequent rise in prices. With high
yield spread levels over Treasury securities of approximately 6 percentage
points at period-end, compared with a 5.9 percentage point 10-year average, and
considering recent improvement in credit fundamentals, high yield bonds
represented 39.4% of the Fund's total net assets on September 30, 2003.

Within the mortgage- and other asset-backed securities sector, we focused our
purchases in areas of the agency mortgage-backed market where we believed
prepayment risk was mispriced, which led us to invest primarily in the 5% to
6.5% coupon range, although we considered higher coupon securities when we saw
value. We also looked to some higher quality mortgage-related securities, as
these securities typically carry a yield premium over their
government-guaranteed counterparts. With the recent decline in interest rates
following July's difficult performance, the mortgage-backed securities market
generally experienced positive total returns since the Fund's late-August
launch. Mortgage- and other asset-backed securities represented 42.6% of the
Fund's total net assets on September 30, 2003.

In the floating rate loan sector, as of period-end, we had purchased or
committed to purchase floating rate loans from 30 different borrowers that met
our fundamental investment criteria. In purchasing securities from this sector,
we found loans in both the primary (new-issue) and secondary markets. Under
normal market conditions, the Fund is expected to have at least 25% of its
assets in each asset category. As of September 30, 2003, 16.2% of the Fund's
total net assets were invested in floating rate securities. Since the date of
this report, proceeds from the Fund's common share offering have been more fully
allocated to the floating rate loan sector.

4 | Semiannual Report

Thank you for your participation in Franklin Templeton Limited Duration Income
Trust. We welcome any comments or suggestions you might have and look forward to
serving your future investment needs.

Sincerely,

[PHOTO OMITTED]
/S/ Christopher J. Molumphy, CFA

[PHOTO OMITTED]
/S/ Richard D'Addario

[PHOTO OMITTED]
/S/ Eric G. Takaha, CFA

[PHOTO OMITTED]
/S/ Roger A. Bayston, CFA

Portfolio Management Team
Franklin Templeton Limited Duration Income Trust

THIS DISCUSSION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF
SEPTEMBER 30, 2003, THE END OF THE REPORTING PERIOD. OUR STRATEGIES AND THE
FUND'S PORTFOLIO COMPOSITION WILL CHANGE DEPENDING ON MARKET AND ECONOMIC
CONDITIONS. THESE OPINIONS MAY NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN
OFFER FOR A PARTICULAR SECURITY. THE INFORMATION IS NOT A COMPLETE ANALYSIS OF
EVERY ASPECT OF ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS
OF FACT ARE FROM SOURCES CONSIDERED RELIABLE, BUT THE ADVISOR MAKES NO
REPRESENTATION OR WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH
HISTORICAL PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY
HELP YOU UNDERSTAND OUR INVESTMENT MANAGEMENT PHILOSOPHY.

Semiannual Report | 5

Performance Summary as of 9/30/03

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses. Capital
gain distributions are net profits realized from the sale of portfolio
securities. Total return reflects the Fund's dividend income, capital gain
distributions, if any, and any unrealized gains or losses. All total returns
include reinvested distributions according to the terms specified in the Fund's
dividend reinvestment plan and do not reflect any sales charges paid at
inception or brokerage commissions paid on secondary market purchases.

PRICE INFORMATION
- -----------------------------------------------------------------------------------------------------
CHANGE 9/30/03 8/27/03
- -----------------------------------------------------------------------------------------------------

Net Asset Value (NAV) +$0.20 $14.53 $14.33
Market Price (AMEX) -$0.04 $14.96 $15.00

PERFORMANCE
- -----------------------------------------------------------------------------------------------------
COMMENCEMENT OF OPERATIONS (8/27/03)
- -----------------------------------------------------------------------------------------------------

Cumulative Total Return 1
Based on change in net asset value +1.40%
Based on change in market price -0.27%
Aggregate Total Return 1
Based on change in net asset value +1.40%
Based on change in market price -0.27%
Distribution Rate 2 N/A

ONGOING MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE; MORE
RECENT RETURNS MAY DIFFER FROM THOSE SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE WITH MARKET CONDITIONS, AND YOU MAY HAVE A GAIN OR LOSS
WHEN YOU SELL YOUR SHARES.

ENDNOTES

1. Total return calculations represent the cumulative or aggregate changes in
value of an investment since commencement of operations. Since shares have
existed for less than one year, average annual total returns are not provided.
2. As of September 30, 2003, there were no reportable distributions. On October
9, 2003, the Fund announced a dividend of $0.0988 per share, payable November 3,
2003, to shareholders of record on October 20, 2003.

6 | Past performance does not guarantee future results. | Semiannual Report

Dividend Reinvestment Plan

The Fund's Dividend Reinvestment Plan (the "Plan") offers you a prompt and
simple way to reinvest dividends and capital gain distributions
("Distributions") in shares of the Fund. PFPC, Inc. (the "Agent"), P.O. Box
43027, Providence, RI 02940-3027, will act as your Agent in administering the
Plan. The Agent will open an account for you under the Plan in the same name as
your outstanding shares are registered. The complete Terms and Conditions of the
Dividend Reinvestment Plan are contained in the Fund's Dividend Reinvestment
Plan Brochure. A copy of that Brochure may be obtained from the Fund at the
address on the back cover of this report.

You are automatically enrolled in the Plan unless you elect to receive
Distributions in cash. If you own shares in your own name, you should notify the
Agent, in writing, if you wish to receive Distributions in cash.

If the Fund declares a Distribution, you, as a participant in the Plan, will
automatically receive an equivalent amount of shares of the Fund purchased on
your behalf by the Agent.

If on the payment date for a Distribution, the net asset value per share is
equal to or less than the market price per share plus estimated brokerage
commissions, the Agent shall receive newly issued shares, including fractions,
from the Fund for your account. The number of additional shares to be credited
shall be determined by dividing the dollar amount of the Distribution by the
greater of the net asset value per share on the payment date, or 95% of the then
current market price per share.

If the net asset value per share exceeds the market price plus estimated
brokerage commissions on the payment date for a Distribution, the Agent (or a
broker-dealer selected by the Agent) shall try, for a purchase period of 30
days, to apply the amount of such Distribution on your shares (less your pro
rata share of brokerage commissions incurred) to purchase shares on the open
market. The weighted average price (including brokerage commissions) of all
shares it purchases shall be your allocated price per share. If, before the
Agent has completed its purchases, the market price plus estimated brokerage
commissions exceeds the net asset value of the shares as of the payment date,
the purchase price the Agent paid may exceed the

Semiannual Report | 7

net asset value of the shares, resulting in the acquisition of fewer shares than
if such Distribution had been paid in shares issued by the Fund. Participants
should note that they will not be able to instruct the Agent to purchase shares
at a specific time or at a specific price. The Agent may make open-market
purchases on any securities exchange where shares are traded, in the
over-the-counter market or in negotiated transactions, and may be on such terms
as to price, delivery and otherwise as the Agent shall determine.

The market price of shares on a particular date shall be the last sales price on
the American stock exchange, or, if there is no sale on the exchange on that
date, then the mean between the closing bid and asked quotations on the exchange
on such date. The net asset value per share on a particular date shall be the
amount most recently calculated by or on behalf of the Fund as required by law.

The Agent shall at all times act in good faith and agree to use its best efforts
within reasonable limits to ensure the accuracy of all services performed under
this agreement and to comply with applicable law, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless such error is
caused by the Agent's negligence, bad faith, or willful misconduct or that of
its employees. Your uninvested funds held by the Agent will not bear interest.
The Agent shall have no responsibility for the value of shares acquired. For the
purpose of cash investments, the Agent may commingle your funds with those of
other participants of the same Fund.

There is no direct charge to participants for reinvesting Distributions, since
the Agent's fees are paid by the Fund. However, when shares are purchased in the
open market, each participant will pay a pro rata portion of any brokerage
commissions incurred. If you elect by notice to the Agent to have it sell part
or all of your shares and remit the proceeds, the Agent will deduct brokerage
commissions from the proceeds.

The automatic reinvestment of Distributions does not relieve you of any taxes
that may be payable on Distributions. In connection with the reinvestment of
Distributions, shareholders generally will be treated as having received a
Distri-bution equal to the cash Distribution that would have been paid.

8 | Semiannual Report

The Agent will forward to you any proxy solicitation material and will vote any
shares so held for you first in accordance with the instructions set forth on
proxies you return to the Fund, and then with respect to any proxies you do not
return to the Fund in the same portion as the Agent votes proxies the
participants return to the Fund.

As long as you participate in the Plan, the Agent will hold the shares it has
acquired for you in safekeeping, in its name or in the name of its nominee. This
convenience provides added protection against loss, theft or inadvertent
destruction of certificates. However, you may request that a certificate
representing your Plan shares be issued to you. Upon your written request, the
Agent will deliver to you, without charge, a certificate or certificates for the
full shares. The Agent will send you a confirmation of each acquisition made for
your account as soon as practicable, but not later than 60 days after the
acquisition date. Although from time to time you may have an undivided
fractional interest in a share of the Fund, no certificates for a fractional
share will be issued. Distributions on fractional shares will be credited to
your account. If you terminate your account under the Plan, the Agent will
adjust for any such undivided fractional interest in cash at the market value of
shares at the time of termination.

You may withdraw from the Plan at any time, without penalty, by notifying the
Agent in writing at the address above or by telephone at 1-800/331-1710. Such
termination will be effective with respect to a Distribution if the Agent
receives your notice prior to the Distribution record date. The Agent or the
Fund may terminate the Plan upon notice to you in writing mailed at least 30
days prior to any record date for the payment of any Distribution. Upon any
termination, the Agent will issue, without charge, stock certificates for all
full shares you own and will convert any fractional shares you hold at the time
of termination to cash at current market price and send you a check for the
proceeds.

The Fund or the Agent may amend the Plan. You will receive written notice at
least 30 days before the effective date of any amendment.

Semiannual Report | 9

Franklin Templeton
Limited Duration Income Trust

FINANCIAL HIGHLIGHTS

---------------
PERIOD ENDED
SEPTEMBER 30,
2003 a
(UNAUDITED)
---------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period .......................... $14.33
---------------
Income from investment operations:
Net investment income b ...................................... .04
Net realized and unrealized gains (losses) ................... .19
---------------
Total from investment operations .............................. .23
---------------
Offering costs charged to capital ............................. (.03)
---------------
Net asset value, end of period ................................ $14.53
===============
Market value, end of period c ................................. $14.96
===============

Total return [based on market value per share] d .............. (.27)%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............................. $371,950
Ratios to average net assets:
Expenses ..................................................... .76% e
Net investment income ........................................ 3.22% e
Portfolio turnover rate ....................................... 8.72%

aFor the period August 27, 2003 (commencement of operations) to September 30,
2003.
bBased on average shares outstanding.
cBased on the last sale on the American Stock Exchange.
dTotal return is not annualized for periods less than one year.
eAnnualized

10 | See notes to financial statements. | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2003 (UNAUDITED)

- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------------------

BONDS 39.4%
COMMERCIAL SERVICES & SUPPLIES .8%
Johnsondiversey Inc., zero cpn. to 5/15/07, 10.67%
thereafter, 144A, 5/15/13 .......................................................... $ 4,300,000 $ 3,010,000
--------------
COMMUNICATIONS 4.2%
ACC Escrow Corp., senior note, 144A, 10.00%, 8/01/11 ................................ 4,000,000 4,320,000
Nextel Communications Inc., senior note, 9.375%, 11/15/09 ........................... 4,000,000 4,360,000
Rural Cellular Corp., senior sub. note, 9.75%, 1/15/10 .............................. 4,000,000 3,660,000
a WorldCom Inc., WorldCom Group, senior note,
6.95%, 8/15/06 ...................................................................... 4,000,000 3,145,000
--------------
15,485,000
--------------
CONSUMER DURABLES .6%
D.R. Horton Inc., senior note, 8.00%, 2/01/09 ....................................... 2,000,000 2,195,000
--------------
CONSUMER NON-DURABLES 2.2%
Altria Group Inc., note, 7.20%, 2/01/07 ............................................. 4,000,000 4,292,672
Revlon Consumer Products, senior secured note, 12.00%, 12/01/05 ..................... 4,000,000 4,020,000
--------------
8,312,672
--------------
CONSUMER SERVICES 8.7%
Advanstar Communications, senior secured note, 144A, 10.75%,
8/15/10 ............................................................................ 4,000,000 4,150,000
Charter Communications Holdings II, senior note, 144A, 10.25%,
9/15/10 ............................................................................ 4,000,000 4,050,000
DIRECTV Holdings/Finance, senior note, 144A, 8.375%, 3/15/13 ........................ 3,300,000 3,737,250
HMH Properties Inc., senior note, B, 7.875%, 8/01/08 ................................ 4,000,000 4,130,000
Hollywood Park, senior sub. note, B, 9.25%, 2/15/07 ................................. 4,000,000 4,105,000
Park Place Entertainment Corp., senior sub. note, 9.375%, 2/15/07 ................... 4,000,000 4,430,000
Quebecor Media Inc., senior disc. note, zero cpn. to 7/15/06, 13.75% thereafter,
7/15/11 (Canada) ................................................................... 4,000,000 3,420,000
Station Casinos Inc., senior sub. note, 9.875%, 7/01/10 ............................. 4,000,000 4,445,000
--------------
32,467,250
--------------
ELECTRONIC TECHNOLOGY 1.1%
Flextronics International Ltd., senior sub. note, 144A,
6.50%, 5/15/13 (Singapore) ......................................................... 4,000,000 3,990,000
--------------
FINANCE 1.1%
Willis Corroon Corp., senior sub. note, 9.00%, 2/01/09
(United Kingdom) .................................................................... 4,000,000 4,260,000
--------------
HEALTH SERVICES 3.1%
Fresenius Medical Care Capital Trust II, 7.875%, 2/01/08 (Germany) .................. 4,000 4,170,000
Healthsouth Corp., senior note, 8.50%, 2/01/08 ...................................... 4,000,000 3,540,000
Tenet Healthcare Corp., senior note, 6.375%, 12/01/11 ............................... 4,000,000 3,850,000
--------------
11,560,000
--------------
INDUSTRIAL SERVICES 1.3%
Allied Waste North America Inc., senior sub. note, B,
10.00%, 8/01/09 ..................................................................... 4,000,000 4,355,000
URS Corp., senior note, 11.50%, 9/15/09 ............................................. 500,000 537,500
--------------
4,892,500
--------------

Semiannual Report | 11

Franklin Templeton
Limited Duration Income Trust

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2003 (UNAUDITED) (CONTINUED)

BONDS (CONT.)
NON-ENERGY MINERALS
Oregon Steel Mills Inc., first mortgage note, 10.00%, 7/15/09 ....................... $ 200,000 $ 165,000
--------------
PROCESS INDUSTRIES 6.1%
Georgia-Pacific Corp., senior sub. note, A, 144A, 9.375%, 2/01/13 ................... 1,700,000 1,906,125
Georgia-Pacific Corp., senior sub. note, 9.375%, 2/01/13 ............................ 2,300,000 2,578,875
Huntsman ICI Chemicals, senior disc. note, zero cpn., 12/31/09 ...................... 6,000,000 2,400,000
IMC Global Inc., senior note, 10.875%, 6/01/08 ...................................... 4,000,000 4,180,000
Jefferson Smurfit Corp., senior note, 7.50%, 6/01/13 ................................ 4,000,000 4,080,000
Lyondell Chemical Co., senior secured note, B, 9.875%, 5/01/07 ...................... 4,000,000 3,830,000
Owens-Illinois Inc., senior note, 7.80%, 5/15/18 .................................... 4,000,000 3,680,000
--------------
22,655,000
--------------
PRODUCER MANUFACTURING 1.8%
Case New Holland Inc., senior note, 144A, 9.25%,
8/01/11 (Netherlands) ............................................................... 4,000,000 4,320,000
TRW Automotive Inc., senior sub. note, 144A, 11.00%, 2/15/13 ........................ 2,000,000 2,340,000
--------------
6,660,000
--------------
RETAIL TRADE 1.2%
Delhaize America Inc., note, 8.125%, 4/15/11 ........................................ 4,000,000 4,420,000
--------------
TRANSPORTATION 1.7%
CP Ships Ltd., senior note, 10.375%, 7/15/12 (United Kingdom) ....................... 2,600,000 2,977,000
United Air Lines, pass through certificates, 7.73%, 7/01/10 ......................... 4,000,000 3,124,700
--------------
6,101,700
--------------
UTILITIES 5.5%
Calpine Corp., senior secured note, 144A, 8.50%, 7/15/10 ............................ 4,000,000 3,700,000
CMS Energy Corp., senior note, 9.875%, 10/15/07 ..................................... 4,000,000 4,300,000
Dynegy Holdings Inc., 2nd priority, senior secured note,
144A, 9.875%, 7/15/10 ............................................................... 2,000,000 2,100,000
Dynegy Holdings Inc., senior note, 8.75%, 2/15/12 ................................... 2,000,000 1,840,000
Utilicorp United Inc., senior note, 9.95%, 2/01/11 .................................. 4,000,000 4,040,000
Williams Cos. Inc., senior note, 8.625%, 6/01/10 .................................... 4,000,000 4,270,000
--------------
20,250,000
--------------
TOTAL BONDS (COST $144,032,600) 146,424,122
--------------
U.S. GOVERNMENT AGENCIES/MORTGAGES 35.9%
FHLMC, 5.00%, 9/01/18 ............................................................... 7,970,744 8,171,881
FHLMC, 4.50%, 10/01/18 .............................................................. 2,000,000 2,018,124
FHLMC, 8.00%, 1/01/31 ............................................................... 1,627,043 1,751,815
FHLMC, 8.50%, 7/01/31 ............................................................... 12,000,349 12,960,493
FHLMC, 6.00%, 1/01/32 ............................................................... 8,179,051 8,453,601
FHLMC, 6.00%, 2/01/32 ............................................................... 7,745,198 8,005,207
FHLMC, 6.00%, 8/01/32 ............................................................... 876,055 905,464
FHLMC, 6.00%, 9/01/32 ............................................................... 252,351 260,823
FHLMC, 6.00%, 11/01/32 .............................................................. 648,847 670,629

12 | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2003 (UNAUDITED) (CONTINUED)

U.S. GOVERNMENT AGENCIES/MORTGAGES (CONT.)
FHLMC, 6.00%, 3/01/33 ............................................................... $ 17,569 $ 18,158
FHLMC, 5.00%, 8/01/33 ............................................................... 6,992,220 6,997,683
FHLMC, 5.50%, 8/01/33 ............................................................... 13,978,752 14,273,935
FHLMC, 5.00%, 10/01/33 .............................................................. 2,000,000 2,000,000
FNMA, 5.00%, 10/01/17 ............................................................... 3,999,998 4,097,981
FNMA, 5.50%, 4/01/18 ................................................................ 4,779,751 4,950,216
FNMA, 8.50%, 8/01/26 ................................................................ 1,071,112 1,169,130
FNMA, 8.00%, 10/01/29 ............................................................... 857,628 935,151
FNMA, 6.50%, 7/01/32 ................................................................ 3,780,860 3,942,327
FNMA, 6.50%, 8/01/32 ................................................................ 16,168,098 16,858,584
FNMA, 5.50%, 5/01/33 ................................................................ 3,916,296 3,998,905
FNMA, 5.50%, 7/01/33 ................................................................ 980,915 1,001,606
FNMA, 5.50%, 8/01/33 ................................................................ 4,993,995 5,099,337
GNMA, 6.50%, 11/15/32 ............................................................... 10,588,806 11,127,193
GNMA, 6.00%, 4/15/33 ................................................................ 4,683,455 4,870,305
GNMA, 5.50%, 5/15/33 ................................................................ 943,098 967,835
GNMA, 5.50%, 6/15/33 ................................................................ 998,876 1,025,076
GNMA, 5.50%, 7/15/33 ................................................................ 1,967,618 2,019,227
GNMA, 5.00%, 9/15/33 ................................................................ 5,000,000 5,005,521
--------------
TOTAL U.S. GOVERNMENT AGENCIES/MORTGAGES (COST $131,642,450) 133,556,207
--------------
OTHER MORTGAGES/ASSET BACKED SECURITIES 6.7%
Aegis, Series 2003-2, 5.12%, 11/25/33 ............................................... 4,000,000 4,000,000
Argent Securities Inc., Series 2003-W5, M4, 10/25/33 ................................ 4,000,000 4,000,000
Morgan Stanley ABS Capital, Series 2003-NC10, 5.20%, 9/26/33 ........................ 3,000,000 3,000,000
Morgan Stanley Dean Witter Capital Trust I,
Series 2003-NC3, B1, 4.12%, 3/25/33 ................................................. 4,508,000 4,397,342
New Century Home Equity Loan Trust,
Series 2003-2, M3, 4.82%, 1/25/33 ................................................... 5,000,000 4,742,588
Option One Mlt, 4.42%, 11/25/33 ..................................................... 3,500,000 3,500,000
Structured Asset Investment,
Series 2003-BC2, M3, 4.37%, 4/25/33 ................................................. 1,471,000 1,425,790
--------------
TOTAL OTHER MORTGAGES/ASSET BACKED SECURITIES (COST $25,141,211) 25,065,720
--------------
b SENIOR FLOATING RATE INTERESTS 16.2%
COMMUNICATIONS 1.6%
AAT Communications Corp., Term Loan A, 5.57-5.76%, 8/13/09 .......................... 1,000,000 992,500
Alec Holdings Inc., Term Loan B, 6.25%, 8/20/10 ..................................... 3,000,000 3,011,250
Nextel Communications Inc., Term Loan D, 4.188%, 3/31/09 ............................ 1,994,975 1,995,166
--------------
5,998,916
--------------
CONSUMER DURABLES .8%
Springs Industries Inc., Term Loan A, 4.438%, 3/05/07 ............................... 2,851,744 2,849,962
--------------

Semiannual Report | 13

Franklin Templeton
Limited Duration Income Trust

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2003 (UNAUDITED) (CONTINUED)

b SENIOR FLOATING RATE INTERESTS (CONT.)
CONSUMER NON-DURABLES 1.8%
B&G Foods Inc., Term Loan, 4.37%, 9/03/09 ........................................... $ 1,000,000 $ 1,010,417
Dean Foods (Suiza Foods), Term Loan B, 3.14%, 7/15/08 ............................... 1,700,000 1,717,000
Meow Mix, First Lien Term Loan, 4.61%, 8/21/09 ...................................... 4,000,000 4,013,752
--------------
6,741,169
--------------
CONSUMER SERVICES 4.8%
Canwest Media Inc., Term Loan D, 3.88%, 5/15/09 (Canada) ............................ 2,000,000 2,018,750
Charter Communications Operating LLC, Term Loan B, 3.86%, 3/18/08 ................... 1,994,937 1,894,192
Dex Media West, Term Loan B, 3.87%, 3/09/10 ......................................... 3,950,000 3,990,322
Extended Stay America Inc., Term Loan A-1, 4.12%, 7/24/07 ........................... 2,500,000 2,495,703
Insight Midwest Holdings, Term Loan, 3.938%, 12/31/09 ............................... 2,030,000 2,034,917
MCC Iowa (Broadband), Term Loan B-1, 3.62%, 9/12/10 ................................. 2,000,000 2,009,722
Readers Digest Association Inc., Term Loan B, 4.188 - 4.26%,
5/20/08 ............................................................................. 3,298,109 3,288,979
--------------
17,732,585
--------------
ELECTRONIC TECHNOLOGY .5%
AMI Semiconductor Inc., Term Loan, 3.62%, 9/30/08 ................................... 1,700,000 1,718,062
--------------
ENERGY MINERALS .5%
Massey Energy Co., Term Loan, 4.62%, 1/01/07 ........................................ 1,995,000 1,997,494
--------------
FINANCE 1.6%
Conseco Inc., Term Loan A, 7.25%, 9/01/09 ........................................... 3,076,923 3,053,846
Conseco Inc., Term Loan B, 9.50%, 9/01/09 ........................................... 923,077 916,154
Infinity Property & Casualty Corp., Term Loan, 3.64%, 7/17/10 ....................... 1,800,000 1,815,750
--------------
5,785,750
--------------
HEALTH SERVICES 1.1%
Alderwoods Group Inc., Term Loan B, 4.37 - 4.39%, 9/12/08 ........................... 2,000,000 2,025,000
AMN Healthcare Services Inc., Term Loan B, 6.00%, 10/02/08 .......................... 1,000,000 1,000,000
Quintiles Transnational Corp., Term Loan B, 7.25%, 9/25/09 .......................... 1,000,000 1,008,750
--------------
4,033,750
--------------
HEALTH TECHNOLOGY .3%
Fisher Scientific International Inc., Incremental Term
Loan B-1, 3.37 - 3.39%, 3/31/10 ..................................................... 1,227,277 1,237,096
--------------
NON-ENERGY MINERALS .5%
International Steel Group, Term Loan B, 5.12%, 5/05/07 .............................. 1,995,000 1,989,390
--------------

14 | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2003 (UNAUDITED) (CONTINUED)

b SENIOR FLOATING RATE INTERESTS (CONT.)
PRODUCER MANUFACTURING 1.2%
Day International Group Inc., Term Loan B, 5.62%, 9/10/09 ........................... $ 1,000,000 $ 1,002,500
Metaldyne Corp., Term Loan D, 5.40 - 5.41%, 12/31/09 ................................ 1,000,000 981,875
Rayovac Corp., Term Loan B, 4.87 - 4.88%, 10/01/09 .................................. 1,000,000 1,003,958
Trimas Corp., Term Loan B, 4.375 - 4.50%, 12/06/09 .................................. 1,317,843 1,319,298
--------------
4,307,631
--------------
TRANSPORTATION .5%
Laidlaw International Inc., Term Loan B, 7.00%, 6/17/09 ............................. 2,000,000 2,014,688
--------------
UTILITIES 1.0%
AES Corp., Term Loan B, 5.13 - 5.32%, 4/30/08 ....................................... 2,000,000 2,003,594
Calpine Corp., Second Lien Term Loan, 6.86%, 7/15/07 ................................ 2,000,000 1,892,222
--------------
3,895,816
--------------
TOTAL SENIOR FLOATING RATE INTERESTS (COST $60,141,043) .............................. 60,302,309
--------------
TOTAL LONG TERM INVESTMENTS (COST $360,957,304) ...................................... 365,348,358
--------------

-------------
SHARES
-------------

SHORT TERM INVESTMENT (COST $43,923,374) 11.8%
c Franklin Institutional Fiduciary Trust Money Market Portfolio ....................... 43,923,374 43,923,374
--------------
TOTAL INVESTMENTS (COST $404,880,678) 110.0% ......................................... 409,271,732
OTHER ASSETS, LESS LIABILITIES (10.0)% ............................................... (37,321,775)
--------------
NET ASSETS 100.0% .................................................................... $371,949,957
==============

aThe fund discontinues accruing income on defaulted securities. See Note 7.
bSee Note 1(c) regarding senior floating rate interests.
cSee Note 6 regarding investments in the Franklin Institutional Fiduciary Trust
Money Market Portfolio.

Semiannual Report | See notes to financial statements. | 15

Franklin Templeton
Limited Duration Income Trust

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
September 30, 2003 (unaudited)

Assets:

Investments in securities:
Cost ................................................................................................. $404,880,678
==============
Value ................................................................................................ 409,271,732
Cash .................................................................................................. 72,876
Receivables:
Investment securities sold ........................................................................... 8,185,446
Interest ............................................................................................. 3,544,887
--------------
Total assets ..................................................................................... 421,074,941
--------------
Liabilities:
Payables:
Investment securities purchased ...................................................................... 48,243,826
Affiliates ........................................................................................... 184,009
Other liabilities ..................................................................................... 697,149
--------------
Total liabilities ................................................................................ 49,124,984
--------------
Net assets, at value ............................................................................ $371,949,957
--------------
Net assets consist of:
Undistributed net investment income ................................................................... $ 1,071,258
Net unrealized appreciation (depreciation) ............................................................ 4,391,054
Accumulated net realized gain (loss) .................................................................. 435,645
Capital shares ........................................................................................ 366,052,000
--------------
Net assets, at value ............................................................................ $371,949,957
==============
Net asset value per share ($371,949,957 (DIVIDE) 25,606,981 shares outstanding) ........................ $14.53
==============

16 | See notes to financial statements. | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the period ended September 30, 2003 a (unaudited)

Investment income:

Dividends ................................................................................................ $ 46,709
Interest ................................................................................................. 1,278,744
------------
Total investment income ............................................................................. 1,325,453
------------
Expenses:
Management fees (Note 3) ................................................................................. 144,605
Administrative fees (Note 3) ............................................................................. 66,398
Other .................................................................................................... 43,192
------------
Total expenses ...................................................................................... 254,195
------------
Net investment income .............................................................................. 1,071,258
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from investments ................................................................ 435,645
Net unrealized appreciation (depreciation) on investments ................................................ 4,391,054
------------
Net realized and unrealized gain (loss) ................................................................... 4,826,699
------------
Net increase (decrease) in net assets resulting from operations ........................................... $5,897,957
============

aFor the period August 27, 2003 (commencement of operations) to September 30,
2003.

Semiannual Report | See notes to financial statements. | 17

Franklin Templeton
Limited Duration Income Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF CHANGES IN NET ASSETS
for the period ended September 30, 2003 a (unaudited)

2003
----------------

Increase (decrease) in net assets:
Operations:
Net investment income ................................................................................ $ 1,071,258
Net realized gain (loss) from investments ............................................................ 435,645
Net unrealized appreciation (depreciation) on investments ............................................ 4,391,054
---------------
Net increase (decrease) in net assets resulting from operations ................................. 5,897,957
Capital share transactions:
Net proceeds from sale of common stock (Note 2) ...................................................... 366,720,000
Common stock offering costs (Note 1h) ................................................................ (768,000)
---------------
Total capital share transactions ...................................................................... 365,952,000
Net increase (decrease) in net assets............................................................ 371,849,957
Net assets:
Beginning of period b ................................................................................. 100,000
---------------
End of period ......................................................................................... $371,949,957
===============
Undistributed net investment income included in net assets:
End of period ......................................................................................... $ 1,071,258
===============

aFor the period August 27, 2003 (commencement of operations) to September 30,
2003.
bOn August 19, 2003, the Fund was seeded by Franklin Advisers Inc. with
aggregate proceeds of $100,000.

18 | See notes to financial statements. | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The Franklin Templeton Limited Duration Income Trust (the Fund) is registered
under the Investment Company Act of 1940 as a diversified, closed-end investment
company. The Fund seeks high current income. The following summarizes the Fund's
significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the last reported sales price. Over-the-counter securities and listed
securities for which no sale is reported are valued within the range of the
latest quoted bid and asked prices. Securities for which market quotations are
not readily available are valued at fair value as determined by management in
accordance with procedures established by the Board of Trustees.

The Fund invests in senior secured corporate loans and senior secured debt that
meet credit standards established by Franklin Advisers Inc. The Fund values its
securities based on quotations provided by banks, broker/dealers or pricing
services experienced in such matters.

B. SECURITIES PURCHASED ON A WHEN-ISSUED, DELAYED DELIVERY, OR TBA BASIS

The Fund may purchase securities on a when-issued, delayed delivery, or to be
announced (TBA) basis, with payment and delivery scheduled for a future date.
These transactions are subject to market fluctuations and are subject to the
risk that the value at delivery may be more or less than the trade date purchase
price. Although the Fund will generally purchase these securities with the
intention of holding the securities, it may sell the securities before the
settlement date. Sufficient assets have been segregated for these securities.

C. SENIOR FLOATING RATE INTERESTS

Senior secured corporate loans pay interest at rates which are periodically
reset by reference to a base lending rate plus a spread. These base lending
rates are generally the prime rate offered by a designated U.S. bank or the
London InterBank Offered Rate (LIBOR).

Semiannual Report | 19

Franklin Templeton
Limited Duration Income Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. INCOME TAXES

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its tax-able income.

E. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Discounts and premiums
on securities purchased are amortized over the lives of the respective
securities. Facility fees are recognized as income over the expected term of the
loan. Dividend income and distributions to shareholders are recorded on the
ex-dividend date.

F. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

G. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Fund. Additionally, in the normal course of business, the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience, the Fund expects the
risk of loss to be remote.

H. OFFERING COSTS

Offering costs are charged to paid-in-capital upon the sale of Fund shares.

20 | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST

On August 27, 2003, the Fund completed its initial public offering. On September
25, 2003, the Fund issued additional shares in connection with the exercise of
the underwriters' over-allotment allocation option. Shares were issued at $15.00
per share before the underwriters discount of $0.675 per share. The Fund's
manager agreed in advance to assume as its own expense all offering and
organizational expenses in excess of $0.03 per share, excluding the underwriter
discount.

Transactions in the Fund's shares were as follows:

------------------------------------------------------------------------------
UNDERWRITERS PROCEEDS TO
SHARES AMOUNT DISCOUNT THE FUND
------------------------------------------------------------------------------

Initial Public Offering .......... 24,600,000 $369,000,000 $16,605,000 $352,395,000
Over-Allotment
Allocation ....................... 1,000,000 15,000,000 675,000 14,325,000
------------------------------------------------------------------------------
Total ...................... 25,600,000 $384,000,000 $17,280,000 $366,720,000
==============================================================================

At September 30, 2003, there were 28,290,900 shares authorized (no par value).

3. TRANSACTIONS WITH AFFILIATES

Certain officers and trustees of the Fund are also officers and/or directors of
the following entities:

- --------------------------------------------------------------------------------
ENTITY AFFILIATION
- --------------------------------------------------------------------------------
Franklin Advisers Inc. (Advisers) Investment manager
Franklin Templeton Services LLC (FT Services) Administrative manager

The Fund pays an investment management fee and administrative fee to Advisers
and FT Services of .50% and .20%, respectively, per year of the average daily
net assets, plus the liquidation value of the preferred shares.

4. INCOME TAXES

Net investment income (loss) differs for financial statement and tax purposes
primarily due to differing treatments of paydown losses, and bond discounts and
premiums.

Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales, paydown losses, and bond
discounts and premiums.

Semiannual Report | 21

Franklin Templeton
Limited Duration Income Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4. INCOME TAXES (CONTINUED)

At September 30, 2003, net unrealized appreciation (depreciation) based on the
cost of investment for income tax purposes of $404,921,851 was as follows:

Unrealized appreciation .................................. $5,131,416
Unrealized depreciation .................................. (781,535)
------------
Net unrealized appreciation (depreciation)................ $4,349,881
============

5. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the
period ended September 30, 2003 aggregated $373,256,348 and $12,597,173,
respectively.

6. INVESTMENTS IN THE FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET
PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (the Sweep Money Fund), an open-end investment company managed by
Advisers. Management fees paid by the Fund are reduced on assets invested in the
Sweep Money Fund, in an amount not to exceed the management fees paid by the
Sweep Money Fund. The Fund earned $46,709 of dividend income from investment in
the Sweep Money Fund for the period ended September 30, 2003.

7. CREDIT RISK AND DEFAULTED SECURITIES

The Fund has 47.3% of its portfolio invested in below investment grade and
comparable quality unrated high yield securities, which tend to be more
sensitive to economic conditions than higher rated securities. The risk of loss
due to default by the issuer may be significantly greater for the holders of
high yielding securities because such securities may be unsecured and
subordinated to other creditors of the issuer.

The Fund held defaulted securities and/or securities for which income has been
deemed uncollectible. The Fund discontinues accruing income on these securities
and provides an estimate for losses on interest receivable. At September 30,
2003, the value of these securities was $3,145,000 representing .85% of the
Fund's net assets. For information as to specific securities, see the
accompanying Statement of Investments.

22 | Semiannual Report

Franklin Templeton
Limited Duration Income Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8. SUBSEQUENT EVENTS

On October 14, 2003, the Fund issued 960,000 shares in connection with the final
exercise of the underwriters' over-allotment allocation option. Shares were
issued at $15.00 per share, resulting in a $14,400,000 prior to the deduction of
$648,000 for the underwriter discount. Total proceeds received by the Fund were
$13,752,000.

On October 20, 2003, the Board of Trustees indicated its intention to authorize
the issuance of preferred shares of beneficial interest representing
approximately 33%, but not more than 38%, of the Fund's total net assets. The
preferred shares will have voting rights and rank senior to the Fund's common
shares.

Upon the issuance of the preferred shares, the Fund will be required to maintain
on a weekly basis a specified discounted value for its portfolio in compliance
with guidelines established by Moody's Investor Services Inc. and Fitch Ratings,
and is required to maintain asset coverage for the preferred shares of at least
200%.

Offering costs incurred in connection with the preferred shares are estimated to
be 1.2% of the offering amount and will be charged to paid-in-capital upon the
issuance of the preferred shares.

Semiannual Report | 23

Franklin Templeton
Limited Duration Income Trust

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group.

24 | Semiannual Report

Literature Request

For a brochure and prospectus, which contains more complete information,
including charges and expenses, call Franklin Templeton Investments at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, telephone
calls to or from our service departments may be monitored, recorded and
accessed. These calls can be identified by the presence of a regular beeping
tone.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL
Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 1

VALUE
Franklin Balance Sheet Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 3
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 4

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund Franklin Technology Fund Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund

INCOME
Franklin Adjustable U.S. Government Securities Fund 5
Franklin's AGE High Income Fund
Franklin Federal Money Fund 5, 6
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 7
Franklin Income Fund
Franklin Money Fund 5, 6
Franklin Short-Intermediate
U.S. Government Securities Fund5
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund

Franklin U.S. Government Securities Fund 5
Templeton Global Bond Fund

TAX-FREE INCOME 8
Double Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 9
Tax-Exempt Money Fund 5, 6

STATE-SPECIFIC TAX-FREE INCOME8
Alabama
Arizona
California 10
Colorado
Connecticut
Florida 10
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 9
Michigan 9
Minnesota 9
Missouri
New Jersey
New York 10
North Carolina
Ohio 9
Oregon
Pennsylvania
Tennessee
Virginia

VARIABLE INSURANCE PRODUCTS FUNDS
Franklin Templeton Variable Insurance
Products Trust 11

1. The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.

2. The fund is only open to existing shareholders as well as select retirement
plans.

3. Effective June 30, 2003, the fund reopened to all new investors.

4. Upon reaching approximately $350 million in assets, the fund will close to
all investors.

5. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

6. No assurance exists that the fund's $1.00 per share price will be maintained.
It is possible to lose money by investing in the fund.

7. The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.

8. For investors subject to the alternative minimum tax, a small portion of
these dividends may be taxable. Distributions of capital gains are generally
taxable.

9. Portfolio of insured municipal securities.

10. These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
limited-term, intermediate-term and money market portfolios (CA and NY).

11. The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

09/03 Not part of the semiannual report

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS

One Franklin Parkway
San Mateo, CA 94403-1906

SEMIANNUAL REPORT AND SHAREHOLDER INFORMATION
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST

INVESTMENT MANAGER
Franklin Advisers, Inc.
1-800/DIAL BEN(R)

TRANSFER AGENT
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

FTF S2003 11/03

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 10(a), the Registrant is attaching as an exhibit a copy of
its code of ethics that applies to its principal executive officers financial
and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert if Frank W.T. LaHaye and he is
"independent" as defined under the relevant Securities and Exchange Commission
Rules and Releases.

Item 4. Principal Accountant Fees and Services. N/A
Item 5. Audit Committee of Listed Registrants. N/A
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. N/A

Item 9. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) Changes in Internal Controls. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

Item 10. Exhibits.

(A) Code of Ethics for Principal Executive and Senior Financial Officers.

(B)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Kimberley H. Monasterio, Chief Financial Officer

(B(2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Kimberley H. Monasterio, Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date November 28, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date November 28, 2003

By /s/Kimberley H. Monasterio
Chief Financial Officer
Date November 28, 2003