Favour Pty Ltd is a large private company for tax purposes. Favour Pty Limited has three shareholders,
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Question:
Favour Pty Ltd is a large private company for tax purposes. Favour Pty Limited has three shareholders, including one foreign resident. Favour Pty Limited’s corporate tax rate is 30%.
The first dividend it pays in 2020/21 is $700 on 20 August 2020 and the dividend has an imputation credit of $150 attached to it. On 15 December 2020, the company pays a dividend of $2,100.
Question
- What amount of imputation credit should Favour Pty Ltd attach to the dividend it pays on 15 December 2020 so that it does not breach the benchmark franking rule.
- The tax consequences for Favour Pty Ltd if it attaches imputation credit totaling $210 on the 15 December 2020 dividend payment (assume Favour Pty Limited has sufficient franking account balance).
Related Book For
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
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