Treatment of dividends
In this lesson, you'll learn how dividends are treated for corporation tax purposes and why this matters for your tax calculations.
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In this lesson
- 0:00 Dividends and corporation tax overview
- 0:09 Why dividends are tax exempt
- 0:33 Dividends paid treatment
- 0:45 Augmented profits and tax instalments
About this lesson
You'll discover that dividends received are generally exempt from corporation tax (since the profits were already taxed before distribution), while dividends paid are not allowable expenses. Crucially, you'll understand why dividend income still matters in tax scenarios: it's included in calculating augmented profits, which determines whether a company must pay corporation tax in quarterly instalments and helps establish the correct tax rate to apply.
Duration: 1m
Transcript
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