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Franking credits

  1. Oct 6, 2007 #1
    you receive a 50% franked dividend of $500. corporate tax rate is 30%.

    what is your assessable income in relation to this?

    from my understanding.

    it would be 500/.85 or something like that.

    u pretend u receive an unfranked dividend and just go off ur personal tax rate.
     
  2. jcsd
  3. Oct 6, 2007 #2

    HallsofIvy

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    for those of us who are not Aussies!

    Call the "original amount" X. If the corporate tax rate is 30$, the corporation has already paid 0.3X leaving X- 0.3X= 0.7X to give to you: 0.7X= 500 so X= 500/.7= $714.28. Would be the "unfranked" amount. Unfortunately, I am still not clear on what the "50%" in a "50% franked dividend of $500" means.
     
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