Franked Income

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS 'Franked Income'

If Company A receives a franked dividend from Company B, Company A does not have to pay corporate tax on the dividend because Company B has done so already.

In other words, once the issuing company has paid corporate tax on the income being distributed, the tax payment is attributed also to the companies who receive the franked dividend.

RELATED TERMS
  1. Ex-Date

    The date on or after which a security is traded without a previously ...
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs ...
  3. Payment Date

    The date on which a declared stock dividend is scheduled to be ...
  4. Record Date

    The date established by an issuer of a security for the purpose ...
  5. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  6. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
Related Articles
  1. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  2. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  3. The risk-free rate of return is the theoretical rate of return of an investment with zero risk.
    Investing

    Risk-Free Rate of Return

    The risk-free rate of return is the theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free ...
  4. In finance, common investments include stocks, bonds, real estate, and mutual funds.
    Investing Basics

    What's an Investment?

    An investment is an asset purchased with the expectation that it will generate income or appreciate over time. In finance, common investments include stocks, bonds, real estate, mutual funds ...
  5. Options & Futures

    Writing Covered Calls On ETFs

    The strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.
  6. Simple interest is a quick method of calculating the interest charged on a loan.
    Investing

    Simple Interest

    Simple interest is a quick method of calculating the interest charged on a loan. Simple interest is determined by multiplying the interest rate by the principal by the number of periods.
  7. Accounting is the recording of financial transactions of a business or organization.
    Professionals

    What is Accounting?

    Accounting is the recording of financial transactions of a business or organization. It also includes the process of summarizing, analyzing and reporting these transactions in financial statements.
  8. Return on Capital Employed (ROCE) is a financial ratio that measures company's ability to earn a return.
    Investing

    Return On Capital Employed - ROCE

    Return on Capital Employed (ROCE) is a financial ratio that measures company's ability to earn a return on all of the capital it employs.
  9. Investing Basics

    How and when are stock dividends paid out?

    Learn about why, when and how companies declare and issue dividend payments to common stock shareholders. Also learn the timeline for when they are processed.
  10. Before you consider launching a business consider these key pieces of advice.
    Entrepreneurship

    Essential Tips For Would-Be Entrepreneurs

    Before you consider launching a business consider these key pieces of advice.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center