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. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
  2. Double Taxing

    A tax law that causes the same earnings to be subjected to taxation ...
  3. Stock

    A type of security that signifies ownership in a corporation ...
  4. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends ...
  5. Franked Dividend

    An arrangement in Australia that eliminates the double taxation ...
  6. Ex-Date

    The date on or after which a security is traded without a previously ...
Related Articles
  1. How And Why Do Companies Pay Dividends?
    Investing Basics

    How And Why Do Companies Pay Dividends?

  2. How Dividends Work For Investors
    Investing Basics

    How Dividends Work For Investors

  3. Essential Tips For Would-Be Entrepreneurs
    Entrepreneurship

    Essential Tips For Would-Be Entrepreneurs

  4. Trading Over the Counter
    Investing

    Trading Over the Counter

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center