To calculate the income tax payable by the investor on the partly-franked dividend, we first need to understand what a partly-franked dividend is. A partly-franked dividend is a dividend that is paid by a company out of profits on which the company has paid tax, but not at the full company tax rate. In this case, OzCpy has paid 88% of the company tax rate on the dividend.

Here are the steps to calculate the income tax payable:

1. Calculate the grossed-up dividend: This is the dividend amount divided by the franking level, which gives us the pre-tax profit that the dividend was paid out of. In this case, the grossed-up dividend is $13.4 thousand / 0.88 = $15.23 thousand.

2. Calculate the franking credit: This is the tax the company has already paid on the dividend. It's the grossed-up dividend minus the dividend amount. In this case, the franking credit is $15.23 thousand - $13.4 thousand = $1.83 thousand.

3. Calculate the taxable income: This is the grossed-up dividend plus the franking credit. In this case, the taxable income is $15.23 thousand + $1.83 thousand = $17.06 thousand.

4. Calculate the tax payable: This is the taxable income multiplied by the investor's marginal tax rate. In this case, the tax payable is $17.06 thousand * 0.45 = $7.68 thousand.

5. Subtract the franking credit: The investor gets a credit for the tax the company has already paid. So the final tax payable is the tax calculated in step 4 minus the franking credit. In this case, the final tax payable is $7.68 thousand - $1.83 thousand = $5.85 thousand.

So, the income tax payable by the investor on the partly-franked dividend is $5.85 thousand.

Question

To calculate the income tax payable by the investor on the partly-franked dividend, we first need to understand what a partly-franked dividend is. A partly-franked dividend is a dividend that is paid by a company out of profits on which the company has paid tax, but not at the full company tax rate. In this case, OzCpy has paid 88% of the company tax rate on the dividend.

Here are the steps to calculate the income tax payable:

1. Calculate the grossed-up dividend: This is the dividend amount divided by the franking level, which gives us the pre-tax profit that the dividend was paid out of. In this case, the grossed-up dividend is $13.4 thousand / 0.88 = $15.23 thousand.

2. Calculate the franking credit: This is the tax the company has already paid on the dividend. It's the grossed-up dividend minus the dividend amount. In this case, the franking credit is $15.23 thousand - $13.4 thousand = $1.83 thousand.

3. Calculate the taxable income: This is the grossed-up dividend plus the franking credit. In this case, the taxable income is $15.23 thousand + $1.83 thousand = $17.06 thousand.

4. Calculate the tax payable: This is the taxable income multiplied by the investor's marginal tax rate. In this case, the tax payable is $17.06 thousand * 0.45 = $7.68 thousand.

5. Subtract the franking credit: The investor gets a credit for the tax the company has already paid. So the final tax payable is the tax calculated in step 4 minus the franking credit. In this case, the final tax payable is $7.68 thousand - $1.83 thousand = $5.85 thousand.

So, the income tax payable by the investor on the partly-franked dividend is $5.85 thousand.

Knowee AI · Accepted Answer

To calculate the income tax payable by the investor on the partly-franked dividend, we first need to understand what a partly-franked dividend is. A partly-franked dividend is a dividend that is paid by a company out of profits on which the company has paid tax, but not at the full company tax rate. In this case, OzCpy has paid 88% of the company tax rate on the dividend.

Here are the steps to calculate the income tax payable:

1. Calculate the grossed-up dividend: This is the dividend amount divided by the franking level, which gives us the pre-tax profit that the dividend was paid out of. In this case, the grossed-up dividend is $13.4 thousand / 0.88 = $15.23 thousand.

2. Calculate the franking credit: This is the tax the company has already paid on the dividend. It's the grossed-up dividend minus the dividend amount. In this case, the franking credit is $15.23 thousand - $13.4 thousand = $1.83 thousand.

3. Calculate the taxable income: This is the grossed-up dividend plus the franking credit. In this case, the taxable income is $15.23 thousand + $1.83 thousand = $17.06 thousand.

4. Calculate the tax payable: This is the taxable income multiplied by the investor's marginal tax rate. In this case, the tax payable is $17.06 thousand * 0.45 = $7.68 thousand.

5. Subtract the franking credit: The investor gets a credit for the tax the company has already paid. So the final tax payable is the tax calculated in step 4 minus the franking credit. In this case, the final tax payable is $7.68 thousand - $1.83 thousand = $5.85 thousand.

So, the income tax payable by the investor on the partly-franked dividend is $5.85 thousand.

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