Calculate the tax payable by a shareholder on a fully franked dividend that is fully imputed,...

Calculate the tax payable by a shareholder on a fully franked dividend that is fully imputed, given the following datA.

Company pre-tax profit: $3 250 000

Profit distribution to shareholders: 70%

Company tax rate: 30%

Shareholder’s tax rate: 43%

Expert Solution

	CALCULATION OF THE TAX PAYABLE BY THE SHAREHOLDERS
	PARTICULARS	AMOUNT
	Company pre tax profit =	$ 32,50,000
	Less: Taxation @ 30% =	$ 9,75,000
	Net income availble for distribution	$ 22,75,000
	Dividend paid 70% =	$ 15,92,500

	Franking Credit	$ 9,75,000


	CALCULATION OF THE TAX OF SHAREHOLDERS

	PARTICULARS	AMOUNT

	Dividend Recived =	$ 15,92,500
	Add: Franking Credit	$ 9,75,000
	Taxable Income	$ 25,67,500
	Tax @ 43%	$ 11,04,025
	Less: Franking Credit	$ 9,75,000
	Tax Payable by Shareholders =	$ 1,29,025

	Answer = Tax Payable by Shareholders =	$ 1,29,025

ekkarill92 answered 1 year ago

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