Question

A resident company pays a $7,000 fully franked dividend to each of its five shareholders. Explain how its shareholders are taxed assuming their relevant details are as follows: - Tom is a resident who has salary income of $60,000; - Teresa is a resident who has no other income; - R Co is a resident private company that has a tax loss of $1,000; - Super Co. is a trustee of a complying superannuation fund that has no other income; and - F Co. is a company that is resident in the UK and has no other income.

Answer 1

TOM: SALARY INCOME $60000

DIVIDEND $7000

TOTAL INCOME $67000

Tax on salary income on first $47630 @15% = $7144.5

on next $12370= $2535.85

Total tax on salary income = $9680.35

Tax on dividend income @10%=$700

TERESA: Tax on dividend income @10% =700

since he is resident in canada

R CO. : Since its a resident private company so it is taxed at a special refundable tax of 38 1/3%

Tax on dividend @38 1/3%= $2683.333

Tax loss can be carried forward

SUPER CO.: Tax on dividend @10%= $700

F CO.: Since it is a resident in U.K. Dividend is paid to a non resident company should be taxed @25%

Tax on dividend @25% =$1750