Posted: April 10th, 2015

Taxation calculation

Taxation calculation

During the 2012-2013 income year, X Ltd (a resident manufacturing company) received a dividend of $100,000 franked to the extent of 30% from Y Co. On 1 July 2010 the shares of the company were owned 80% by William and 20% by Richard. There was no change in the shareholding of the company until 1 September 2011 when the shareholding of the company changed to 10% William, 15% Richard and 75% Angela and remained so until 30 June 2013. On 30 May 2012 the company?s acquired an insurance business. The company earned $20,000 from the insurance business in the income year ending 30 June 2013. Assuming that the company?s only other receipt of income is $100,000 dividend referred to above and assuming X Ltd has carry forward losses of $60,000 from the 2010-2011 income year, how much tax will it be required to pay for the 2012-2013 income year?

a)What difference would it make if the company had acquired the insurance business on 30 May 2011?

b)What difference would it make if on 1 September 2011 Angela Pty Ltd had acquired 75% of the shares in X Ltd and the shareholding of Angela Pty Ltd on 1 September 2011 had been Angela 60%, William 20% and Richard 20%?