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. 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. 10 Sources Of Nontaxable Income
    Taxes

    10 Sources Of Nontaxable Income

  4. Achieving Better Returns In Your Portfolio
    Bonds & Fixed Income

    Achieving Better Returns In Your Portfolio

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center