If claiming an offset of $1,000 or less, you only need to record the actual amount of foreign income tax paid that counts towards the offset (up to $1,000).
DEFERRED TAX LIABILITY
Market value
Less: Cost base
Less: Cost base adjustment
Latent capital gains
Less: Carried forward capital gains
Latent gross tax capital gains
Less: discount (÷ 3)
Less: ECPI (x %)
Latent net capital gains
x 0.15
Deferred tax liability @15%
PAYGI VS PAYGW
FRANKING ACCOUNT (Div 205 ITAA97)
To indicate to the company how much franking credits can be passed to shareholders
Franking deficit tax (FDT) is PAYABLE if the company has a deficit in its franking account at end of the year
deficit = the company has distributed more franking credits than is warranted by the tax it has paid
45 days holding rule Imputation
imputed cost = incurred by virtue of using an asset instead of investing it
corporate tax entities have the option of passing on/'imputing' credits for the tax = ‘franking’ the distribution = tax offsets (recipient)
prevents double taxation –taxation of profits earned (company) & when a distribution received (recipient)
TRUST DISTRIBUTION
Cash trust distribution received = Total Taxable Australian Income
Accounting franked income
FC
Other Aus Income
Add: Taxable foreign income (incl. FTC) Net Capital Gains
Discntd Capital Gains
CGT Concssn
Other Capital Gains
Add:
Tax Free Income
Tax Deferred Income
Less:
FTC
FC
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