UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSRS

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)

Craig S. Tyle, 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: 9/30/13__

Item 1. Reports to Stockholders.

Semiannual Report

Franklin Templeton

Limited Duration Income Trust

Your Fund’s Goals and Main Investments: Franklin Templeton Limited Duration Income Trust seeks to provide high, current income, with a secondary objective of capital appreciation to the extent it is possible and consistent with the Fund’s primary objective, through a portfolio consisting primarily of high yield corporate bonds, floating rate corporate loans and mortgage- and other asset-backed securities.

Dear Shareholder:

This semiannual report for Franklin Templeton Limited Duration Income Trust covers the period ended September 30, 2013.

Performance Overview

For the six months under review, Franklin Templeton Limited Duration Income Trust had cumulative total returns of +1.41% based on net asset value and -9.31% based on market price. Net asset value decreased from $14.30 per share on March 31, 2013, to $14.06 at period-end, and the market price decreased from $14.82 to $13.00 over the same period. You can find the Fund’s long-term performance data in the Performance Summary on page 8.

Economic and Market Overview

The U.S. economy, as measured by gross domestic product, grew during the six-month period ended September 30, 2013. The pace of economic growth

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 14.

Semiannual Report | 1

accelerated in the second quarter of 2013, reflecting a surge in exports as well as strong consumer and real estate spending levels. These gains were partially offset by continued federal budget cuts. Accelerating home sales accompanied record-low mortgage rates, low inventories and a nearly eight-year low in U.S. foreclosures. Manufacturing, a mainstay of economic productivity, expanded during the period, and the unemployment rate fell to 7.2% in September 2013 from 7.8% a year earlier.¹

The Federal Reserve Board (Fed) continued to put downward pressure on long-term interest rates with its monthly quantitative easing purchases of $85 billion in mortgage-backed securities and long-term Treasuries. In May, Fed Chairman Ben Bernanke said the Fed could gradually wind down its monthly purchases, assuming continued U.S. economic improvement. The prospect of reduced Fed purchases sparked market declines. A September announcement, however, reassured investors that the Fed would maintain its current pace of purchases.

Investors remained concerned during the period about the state of the U.S. budget, particularly about how the expired payroll tax cut, far-reaching federal spending cuts and future federal debt ceiling negotiations could affect the economic recovery. At period-end, partisan disagreement about a new health care law led Congress to miss a budgetary deadline authorizing routine federal funding. The federal government partially shut down, suspending non-essential U.S. government services beginning on October 1. Critical functions, however, including the nation’s military, air traffic control and social security operations, continued their activities. Analysts noted the shutdown would not significantly impact the economy unless it persisted for an extended period, but the political impasse added to concerns about congressional ability to successfully navigate federal debt ceiling negotiations in October.

Investor concerns about the shutdown pushed the 10-year U.S. Treasury note yield to 2.64% at fiscal year-end from 1.87% on March 31, 2013. During much of the six-month period, investors sought higher bond yields and were willing to assume some additional risk. Below-investment-grade corporate bonds, as measured by the Credit Suisse (CS) High Yield Index, outperformed investment-grade fixed income markets, as measured by the Barclays U.S. Aggregate Index.

Investment Strategy

We invest in a diversified mix of fixed income securities, primarily high yield corporate bonds, senior secured floating rate corporate loans, and mortgage-and other asset-backed securities. Our top-down analysis of macroeconomic

1. Source: Bureau of Labor Statistics.

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trends combined with a bottom-up fundamental analysis of market sectors, industries and issuers drives our investment process. We seek to maintain a limited duration, or interest rate sensitivity, to moderate the impact that fluctuating interest rates might have on the Fund’s fixed income portfolio. Within the corporate bond and corporate 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 analysis of security prepayment assumptions, potential pricing inefficiencies and underlying collateral characteristics.

Manager’s Discussion

Heightened interest rate volatility and an overall increase in long-term interest rates largely affected the Fund’s performance during the six-month review period. The 10-year Treasury’s rapid yield increase in early May followed comments from Fed Chairman Ben Bernanke regarding the timing of an eventual tapering of government stimulus measures. The 10-year Treasury note yield rose from a low of 1.66% in early May to 2.98% in early September, before Fed comments that any stimulus tapering would be data driven and not represent a substantial change to existing Fed policy. Although this statement seemed to mollify the market, and the 10-year Treasury yield ended the period at 2.64%, well below the peak, fixed income markets had already felt the impact.

The stock market was volatile but generally positive during the period, as the potential for reduced stimulus reflected expectations of continued economic growth. For example, the Standard & Poor’s^® 500 Index returned +8.31% for the six-month period.² However, interest rate increases directly affected the fixed income markets, with the greatest impact on more interest rate-sensitive bonds. In the volatile interest rate environment, leveraged loans returned +1.83%, followed by +0.98% for high yield corporate bonds and -0.96% for mortgage-backed securities (MBS), as measured by the CS Leveraged Loan (LLI), CS High Yield and Barclays U.S. MBS Indexes, respectively.² During the period, we increased the Fund’s exposure to high yield corporate bonds and reduced exposure to leveraged loans and MBS.

2. Source: © 2013 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. STANDARD & POOR’S^®, S&P^® and S&P 500^® are registered trademarks of Standard & Poor’s Financial
Services LLC. The indexes are unmanaged and include reinvested dividends. One cannot invest directly in an index,
and an index is not representative of the Fund’s portfolio.

Semiannual Report | 3

High Yield Corporate Bonds

Although credit fundamentals remained favorable, high yield corporate bonds posted a below-coupon +0.98% return for the review period.² With defaults below their historical average and widely expected to remain low for at least the next year, the main drag on high yield corporate bond performance was the interest rate increase in May and June. The higher quality of the high yield corporate bond spectrum, bonds rated split BB or higher, had negative returns as these bonds tended to have lower coupons and often longer maturities that made them generally more interest rate sensitive.³ Conversely, the lowest rated high yield corporate bonds, those with a CCC or distressed rating, provided the highest returns. Performance for these lower rated bonds was driven more by the underlying credit fundamentals than by interest rates.

The high yield corporate bond index’s yield increased 50 basis points (100 basis points equal one percentage point) during the period as the average bond price fell notably.⁴ With credit fundamentals still seen as favorable and investor demand for the asset class continuing, companies maintained an active new-issuance pace to refinance debt, extend maturities and fund acquisitions. Signs of increasing shareholder-friendly activity were also evident, including deals to fund dividend payments or share repurchases. We remained favorable toward high yield corporate bonds and ended the period with our heaviest weighting in the asset class.

Floating Rate Corporate Loans

For the six-month period, the corporate loan asset class returned +1.83%, as measured by the CS LLI.² Continued strong demand supported lower rated credits, which outperformed higher rated credits that had been issued at tighter spreads earlier in the period. As a result, the average discounted spread to maturity remained unchanged at LIBOR +429 basis points, despite a slight decline in loan prices during the period.⁵

Loans held up reasonably well during the period despite a brief pullback in May and June as the high yield market sold off. This sell-off followed expectations that the Fed could begin to taper its bond buying program, and resulted in rising Treasury yields and fixed income market volatility. Loan demand softened during this period as high yield bond fund managers who had purchased loans earlier in the year sold loans to meet redemptions and to seek to take advantage of the buying opportunities created by falling bond prices.

3. Split BB means for credit rating agencies Standard & Poor’s and Moody’s Investor Service, a BB or equivalent rating
by one agency and a B rating by the other.
4. Source: Copyright © 2013 CREDIT SUISSE GROUP AG and/or its affiliates. All Rights Reserved.
5. Source: Standard & Poor’s Leveraged Commentary & Data.

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During periods of increased volatility, demand remained steady in the corporate loan market as retail fund inflows continued, owing to the loans’ shorter duration and the steady pace of new issuance for collateralized loan obligations, although not as robust as in early 2013. Early in the period, refinancing and repricing transactions were heavy at a time when limited new issuance of corporate loans resulted in demand exceeding supply. The brief pullback in the loan market following the high yield sell-off led to what we viewed as better equilibrium in the loan market and temporarily slowed the pace of repricing transactions.

However, new-issue supply picked up toward period-end as a few large merger and acquisition transactions led to weaker secondary prices and softer technical conditions. Overall, fundamentals remained supportive and loan default rates remained below the historical average, with the loan default rate at 2.4% at period-end.⁴

Mortgage-Backed and Asset-Backed Securities

High-quality agency MBS experienced heightened volatility during the period. Although MBS outperformed Treasuries, they did not keep pace with high yield corporate bond and corporate loan sector performance. Mortgage markets were highly influenced by expectations surrounding potential future policy moves by the Fed. The sector sold off early in the period as markets expected the Fed to begin tapering asset purchases. In a move that went against general expectations, the Fed refrained from tapering, noting fiscal uncertainty and an increase in interest rates, and mortgages rebounded in September.

Although the Fed’s continued buying supported the sector, the potential tapering or termination of its program posed a risk to MBS yield spreads over Treasuries. As interest rates and mortgage rates climbed, actual prepayment levels declined and remained contained.

During the period, we increased the Fund’s allocation to MBS coupons in the 3.0% to 4.5% range and reduced exposure to higher coupons in the 5.0% to 5.5% range. As our allocation shifted to lower coupons, our heaviest allocation was in coupons in the 3.0% to 4.5% range.

Outside conventional MBS, the Fund remained allocated to higher quality securitized sectors with strong credit fundamentals and continued to invest in asset-backed securities and commercial-mortgage backed securities (CMBS). The Fund maintained strong exposure to CMBS, including securities lower in the capital structure, but during the period we increased allocation to higher quality, super-senior securities that we felt offered an attractive opportunity. Credit fundamentals showed signs of stabilization, yet we expect the commercial real estate landscape to remain challenged over the intermediate term.

Semiannual Report | 5

Although these sectors had negative total returns and underperformed the high yield corporate bond and corporate loan sectors, they still performed better than Treasuries.

Thank you for your continued participation in Franklin Templeton Limited Duration Income Trust. We look forward to serving your future investment needs.

Sincerely,

Portfolio Management Team
Franklin Templeton Limited Duration Income Trust

CFA^® is a trademark owned by CFA Institute.

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2013, the end
of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings
may change depending on factors such as 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 investment manager 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.

6 | Semiannual Report

Semiannual Report | 7

Performance Summary as of 9/30/13

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 reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not reflect any sales charges paid at inception or brokerage commissions paid on secondary market purchases. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gains distributions, if any, or any realized gains on the sale of Fund shares.

Performance data represent past performance, which does not guarantee future results. Investment return and principal
value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from
figures shown.

Endnotes

All investments involve risks, including possible loss of principal. Interest rate movements and mortgage prepayments will affect the Fund’s
share price and yield. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in a fund adjust to a rise
in interest rates, the Fund’s share price may decline. Investments in lower rated bonds include higher risk of default and loss of principal. The
Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

1. Figures are for common shares. As of 9/30/13, the Fund had leverage in the amount of 32.02% of the Fund’s total portfolio. The Fund employs
leverage through the issuance of Auction Preferred Shares and purchase of Mortgage Dollar Rolls. The use of financial leverage creates an oppor-
tunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market
price of common shares). The cost of leverage rises and falls with changes in short-term interest rates. Such increases/decreases in the cost of the
Fund’s leverage may be offset by increased/decreased income from the Fund’s floating rate investments.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Six-month
return has not been annualized.
3. Assumes reinvestment of distributions at net asset value.
4. Assumes reinvestment of distributions based on the dividend reinvestment plan.

8 | Semiannual Report

Annual Shareholders’ Meeting

September 19, 2013

At an annual Meeting of Shareholders of the Fund held on September 19, 2013, shareholders approved the election of the following persons as Trustees of the Fund.

Note: Sam Ginn, Gregory E. Johnson, Rupert H. Johnson, Jr., Frank W.T. LaHaye, J. Michael Luttig, Frank A, Olson
and Larry D. Thompson are Trustees of the Fund who are currently serving and whose terms of office continued after
the meeting.

Semiannual Report | 9

Dividend Reinvestment Plan

The Fund’s Dividend Reinvestment Plan (Plan) offers you a prompt and simple way to reinvest dividends and capital gain distributions (Distributions) in shares of the Fund. BNY Mellon Investment Servicing (US) Inc. (Agent), P.O. Box 43006, Providence, RI 02940-3006, 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. Participants may contact the Agent at the address above to obtain a copy of the Brochure.

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 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.

10 | Semiannual Report

The market price of shares on a particular date shall be the last sales price on NYSE Amex, 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 in 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 Distribution equal to the cash Distribution that would have been paid.

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

Semiannual Report | 11

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 (866) 340-2909. 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.

12 | Semiannual Report

^aBased on average daily common shares outstanding.
^bBased on the last sale on the NYSE Amex.
^cTotal return is not annualized for periods less than one year.
^dBased on income and expenses applicable to both common and preferred shares.
^eRatios are annualized for periods less than one year.
^fBenefit of expense reduction rounds to less than 0.01%.
^gSee Note 1(e) regarding mortgage dollar rolls.
^hPrior amount of $115,173 has been corrected to include the impact of mortgage dollar rolls.

Semiannual Report | The accompanying notes are an integral part of these financial statements. | 13

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited)

14 | Semiannual Report

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

Semiannual Report | 15

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

18 | Semiannual Report

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

Semiannual Report | 19

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

Semiannual Report | 21

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)

22 | Semiannual Report

Franklin Templeton

Limited Duration Income Trust

Statement of Investments, September 30, 2013 (unaudited) (continued)