In: Finance
Juice Pty Ltd is a resident company. It has two resident shareholders. One, Peter owns one A class share in the company and is on a marginal tax rate of 45%.
Assume the after-tax distributable profit of Juice Pty Ltd is calculated as follows:
Profit (including income) $200,000
Income $100,000
Tax @ 30% $ 30,000
Franking credits $ 30,000
After-tax income $ 70,000
After-tax profit $170,000
Required A:
Disregarding the Medicare levy, calculate the after-tax effects for Peter if he receives as a distribution a dividend of $85,000 franked to 50%
In your response give reasons and refer to sections of legislation and cases, where relevant.