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Lee Taylor
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Good afternoon all,
I have come across 2 confusing scenarios regarding pensions and Dividends to in order to calculate Frank Invested Income.
1) Some questions deduct pension contributions from employment income as well as adjustment personal allowance and of additions of band rates. In other questions pensions are now deducted from employment income…why is this??
2) i have come across questions that a company has associated companies therefore my understanding is that we do not gross up the dividends..some questions gross up the dividends even though a company has assosiated companies…again this causes confusion on when inshould gross up FII.
Please help..
Thanks
Lee
Tax Tutor
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- Replies: 3965
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Occupational pension scheme contributions paid by employees are deducted from employment income, whereas gross personal pension contributions are deducted in deriving adjusted net income when computing any restriction of the personal allowance and they are also used to extend the basic rate band and higher rate band limits – see pensions chapter in OT course notes.
FII is the grossed up amount of dividends received from NON associated companies which is added to Taxable Total Profits to give Augmented Profits.
Lee Taylor
Tax Tutor
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