Constructions Ltd (Diamond) is a large construction company. Diamond is an Australian resident company for tax purposes. The company accountant, Bob, is in the process of preparing income tax returns for the company and staff, and seeks advice on the following matters: During the 2021/22 income year, Diamond made three frankable distributions. The first distribution ($1 million) is franked at 70%, the second distribution ($2million) is franked at 80%, and the third distribution ($1 million) is franked at 50%. (Assume a corporate tax rate for imputation purposes of 30%). Diamond also received a fully franked dividend of $1.5 million from another Australian resident company SardiusCo Ltd. Required: Advise Diamond, Bob and Charles regarding the income tax implic
Diamond Constructions Ltd (Diamond) is a large construction company. Diamond is an Australian resident company for tax purposes. The company accountant, Bob, is in the process of preparing income tax returns for the company and staff, and seeks advice on the following matters:
During the 2021/22 income year, Diamond made three frankable distributions. The first distribution ($1 million) is franked at 70%, the second distribution ($2million) is franked at 80%, and the third distribution ($1 million) is franked at 50%. (Assume a corporate tax rate for imputation purposes of 30%). Diamond also received a fully franked dividend of $1.5 million from another Australian resident company SardiusCo Ltd.
Required: Advise Diamond, Bob and Charles regarding the income tax implications arising from the above facts in relation to the 2021/22 income year. In your answer make sure you refer to any relevant cases, legislative provisions, tax rulings and principles of tax law
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