Hi The question is simple enough. the following figures apply to a proprietary life insurance company BLAGAB I-E 520 OTLB profit 260 minimum profit is 300, of which 250 is shareholders'(S/H) unfranked income calculated the amount of corporation tax payable. However I don't understand the answer. I get that S/H unfranked income and OLTB profit is taxed at 24% so we have (250+260)*0.24= 122.4 I am assuming the remaining of the minimum profit (50) is the dividend income, which from the page 4 in chapter 7, does not suffer any further tax. Therefore, shouldn't the amount of profit paying 20% tax be 220 (520-300), rather than 270 (520-250) as given in the answer to this question. The answer implies the BLAGAB dividend income also pays 20% tax? Thanks
Nevermind I understand the answer now. Dividend income is not in the BLAGAB I-E to start off with. We are deducting shareholders unfranked income from BLAGAB I-E. with the sum suffering 20% tax
