Rogue Traders Pty Ltd’s income for 2007-08 is $500,000 on which it pays tax at 30%. It distributes the entire balance of that income as dividends, franking them to the greatest extent possible. bumume that it has four shareholders each who own one share of a different clbum namely:
• Nat (a non-resident), (Clbum A)
• James (a resident), (Clbum B)
• Danny (a resident), (Clbum C) and
• Cam Pty Ltd (a resident company) (Clbum D).
The four shareholders are also directors (Cam has a nominee director). Their practice has always been to pay the same amount of dividends to each shareholder and to pay all available profits out as dividends.
Calculate the tax payable by each of those shareholders on the dividends they receive. bumume that Nat and James pay tax at the top marginal rate of 45% and that Danny pays at 20% (ignore the medicare levy). Also explain how Cam Pty Ltd would treat the franking credits it receives. (6 marks)
If all the shareholders were members of a family unit what might your advice be to them and the company on 30 June 2008? In particular would there be any tax advantage in paying a greater proportion of franked dividends to Danny or unfranked dividends to Nat? Would either of these strategies be possible?
[Total for question: 10 marks]
om****ing god what the hell is this?????!
nvm the arks are uin the bag. all i have to do i sleep whiht teh examimer. it works for hot girl so it sould works for me. come ere switty and suck me oof the nyi can give me the 4 marks Log in to see images!