Dividend Taxation.

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Olf

Original Poster:

11,974 posts

220 months

Thursday 26th July 2007
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Please correct me if I'm worng in the following example which is my understanding of Corp Tax and Div Tax Credits.

Say my Company makes a taxable profit of £10,000.

The small co. CT on this is 19% so, my co. puts aside £1,900 for that liability. That leaves a net profit of £8,100.

If that profit were then to be distributed via dividends to shareholders then the company would alrady have paind all necessary taxes and the 10% dividend tax credit is rolled up in the Corp Tax. In other words the whole 8,100 is distributable with an assumed tax credit of £810 which does not need to be put aside as it was already included within the Corp Tax...


Olf

Original Poster:

11,974 posts

220 months

Thursday 26th July 2007
quotequote all
emicen said:
Good question Olf, I'd quite like to know the answer to that one aswell!

Would point out the corporation tax rate for small companies this year is 20%, was 19% in 2006.

Edited by emicen on Thursday 26th July 10:30
good point well made!

Olf

Original Poster:

11,974 posts

220 months

Monday 30th July 2007
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Anyone?

Olf

Original Poster:

11,974 posts

220 months

Monday 30th July 2007
quotequote all
Thank you very much Eric. A clearer answer one could not hope for!