Question

Question 5

You must answer both A and B

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.

can you answer me in 400 words

Answer 1