Assuming an imputation tax system with a corporate tax rate of 30%,what is the net personal tax for an investor with a personal tax rate of 15%,if the fully franked dividend is $14 000?

Question

Quizplus · Accepted Answer

The size of the assessable dividend is the franked dividend divided by 1 minus the corporate tax rate,or 14000/(1 - 0.30)= 20000.On this amount,the investor will pay tax at the marginal rate of 15% .The net personal tax amount is therefore 3000 - 6000 = -$3000,making A the correct answer.

Assuming an Imputation Tax System with a Corporate Tax Rate −$3000-\$ 3000−$3000

Assuming an Imputation Tax System with a Corporate Tax Rate $-\$ 3000$