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Franked Investment Income

Forums › ACCA Forums › ACCA TX Taxation Forums › Franked Investment Income

  • This topic has 8 replies, 3 voices, and was last updated 12 years ago by wgk.
Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • November 8, 2012 at 7:44 am #55115
    zmukhtar
    Member
    • Topics: 8
    • Replies: 21
    • ☆

    Hello everyone
    Im facing a problem and was wondering if anyone here can help me,
    till half hour ago i thought franked investment income comprises of both dividends from uk and overseas companies(both resident and non uk residents)
    but in a question i tried to attempt(BPP Practice and Revision Kit question 32 – Crash Bash Ltd) they have only included divided from uk company and ignored one from overseas 100% subsidiary ??
    does the dividend from an overseas subsidiary(resident overseas) not form part of franked investment income ?

    November 8, 2012 at 8:51 am #106789
    wgk
    Participant
    • Topics: 55
    • Replies: 80
    • ☆☆

    see chapter 20 (opentuition notes) – section 2.2 (g) pp 111

    have not looked at the question you refer to, but i suspect the uk company is NOT an “associated” company – therefore it will be included in FII calculation.

    also see chapter 19 (opentuition notes) – section 2.3(b) pp 105 – “In calculating augmented profits dividends received from associated companies are excluded.”
    And as you stated that the overseas company is a 100% subsidiary, then it is an associate and subsequently will not be included in FII calculation.
    🙂

    November 8, 2012 at 1:42 pm #106790
    zmukhtar
    Member
    • Topics: 8
    • Replies: 21
    • ☆

    thanks dude its make sense ..
    so to sum up .. it doesn’t matter if the dividend is from UK company or subsidiary of UK resident company abroad or resident outside the UK company their dividend ll be included in FII as long as the parent company owns less than 50% ??

    November 8, 2012 at 1:43 pm #106791
    zmukhtar
    Member
    • Topics: 8
    • Replies: 21
    • ☆

    s*

    November 8, 2012 at 2:35 pm #106792
    wgk
    Participant
    • Topics: 55
    • Replies: 80
    • ☆☆

    associated company (>50%) – UK based or outside UK – do NOT include in FII

    non-associated company (<50%) - UK based or outside UK - include in FII

    🙂

    November 9, 2012 at 1:35 pm #106793
    zmukhtar
    Member
    • Topics: 8
    • Replies: 21
    • ☆

    gracias

    November 12, 2012 at 9:43 pm #106794
    Stacey
    Member
    • Topics: 8
    • Replies: 31
    • ☆

    Yes as others have said….dividends received from any company which is 51% or more, DO not include if FII.
    Include ALL other dividends whether UK or non UK company.

    Good luck!

    November 12, 2012 at 9:43 pm #106795
    Stacey
    Member
    • Topics: 8
    • Replies: 31
    • ☆

    Yes as others have said….dividends received from any company which is 51% or more, DO not include if FII.
    Include ALL other dividends whether UK or non UK company.

    Good luck!

    November 13, 2012 at 3:48 am #106796
    wgk
    Participant
    • Topics: 55
    • Replies: 80
    • ☆☆

    My understanding is “over 50%” (OpenTuition pp. 105) – so by having 50.1% indicates control in a company and therefore it would be considered an associate.

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