franked investment income

franked investment income
When a company receives a dividend from another company it will also receive the appropriate tax credit which can then be offset against ACT on its own distributions in the same period or carried forward to the next accounting period. Tax losses can also be set against franked investment income. With the abolition of ACT from 1 April 1999, franked investment income no longer applies. Group dividends are governed by Group Income Elections. ACT on dividends paid out of foreign income which cannot be set against the company's corporation tax liability is repaid. With the exception of international holding companies the rules for payment of foreign income dividends ceased to apply from 6 April 1999.

Easyform Glossary of Law Terms. — UK law terms.

franked investment income
Prior to 6 April 1999 where two UK resident companies were not part of the same group and one made a distribution to the other it usually paid advance corporation tax (ACT). However, the recipient company did not have to pay corporation tax on the distribution (which, in its hands, was called FII), and when it made a distribution to its own shareholders out of the FII it did not have to pay ACT. Special rules, however, applied to foreign income dividends and international headquarters companies.
The concept of FII continues to exist despite the abolition of ACT in order to reduce the amount of shadow ACT which a company is treated as paying and speeds the recovery of surplus ACT after this date.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Franked Investment Income — Income that is received as a tax free distribution by one company in the U.K. from another. This income is typically tax free to the receiving firm and is usually distributed in the form of a dividend. Franked investment income was introduced in… …   Investment dictionary

  • franked investment income — is dividends received from a UK company. It does not matter whether the dividend is a preference or ordinary dividend. For a corporate investor, franked investment income is free of any further corporation tax, on the basis that the company… …   Financial and business terms

  • franked investment income — FII Formerly, dividends and other distributions from UK companies received by other companies. The principle of the imputation system of taxation was that once one company had paid corporation tax, any dividends it paid could pass through any… …   Accounting dictionary

  • franked investment income — A concept formerly used in the imputation system of taxation that was discontinued when advance corporation tax was abolished in 1999. Dividends and distributions from UK companies received by other companies were regarded as franked , i. e.… …   Big dictionary of business and management

  • franked investment income — noun (in the UK) income in the form of dividends paid to a company from earnings on which corporation tax has already been paid by the originating company …   English new terms dictionary

  • Franked Income — After tax investment income that is distributed by one U.K. company to another. This income is often distributed in the form of dividends. The idea behind franked income is to prevent double taxation. If Company A receives a franked dividend from …   Investment dictionary

  • Свободный от налога доход на инвестиции — FRANKED INVESTMENT INCOME (GB) Доходы или дивиденды, полученные одной компанией от другой компании, которая уже уплатила с них корпоративный налог, и не подлежащие поэтому налоговому обложению. Freedom of entry. См. Condition of entry …   Словарь-справочник по экономике

  • United Kingdom corporation tax — Throughout this article, the unqualified term pound and the £ symbol refer to the United Kingdom pound. Taxation in the United Kingdom This article is part of the series: Politics and government of the United Kingdom Central government …   Wikipedia

  • Доходы — [income] средства в денежной или натуральной форме, получаемые экономическими субъектами (отдельным лицом, семьей, кооперативом, фирмой, государством и т.д.) в результате их экономической деятельности. Оцениваются за определенный период, обычно… …   Экономико-математический словарь

  • доходы — Поступления за период или другие формы повышения стоимости активов хозяйственной единицы или изменение состояния ее обязательств (или комбинации того и другого) от поставки или производства продукции, предоставления услуг или других операций,… …   Справочник технического переводчика

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”