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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4429
Experience:  FCCA FCMA CGMA ACIS
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I have currently received a set of accounts to process from

Resolved Question:

Hello, i have currently received a set of accounts to process from a predecessor and the way they have treated Franked Investment Income and selling shares has confused me, can i run through with you my understanding of things?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
01753 208080, Gavin Bowman
Expert:  Sam replied 1 year ago.

Hi

I am Sam and I am one of the UK tax experts here on Just Answer -

Can you advsie further re the franked investment income and sale of shares, whether this is an individual with their tax affairs or a company -

I can then see if I can assist.

Thanks

Sam

Customer: replied 1 year ago.
Can i run through with you on the phone if i call you, alternatively please call me on 01753 208080, i will type up everything whilst i wait to speak with you if thats ok
Customer: replied 1 year ago.
It is a limited company
Expert:  Sam replied 1 year ago.

I shall opt out as Limited companies are not my remit - but another expert should pick your question up soon - who will be able to assist

Thanks

Sam

Customer: replied 1 year ago.
Part 1: Franked Investment Income on the P&L and Corporation Tax Return/Computation: I have details of all the dividend income received into a business trading account. This will be treated separately through the business to Turnover. Then the amount relating to franked investment income will be declared through the corporation tax computation ensuring that there is no tax due on this income received, but separately declared through the profit and loss accounts of the limited company.
Customer: replied 1 year ago.
Part 2: How best to deal with the shares bought and sold on the balance sheet and the treatment of shares sold. Treat as intangible fixed assets? This would make sense to me, however, my predecessor seems to have just used one nominal code and made a pigs ear of being precise. So amounts have been journalled in and out in the previous year and i am left with a balance that seems confusing. I really don't understand how to treat the shares bought and sold based on what i'm reading from my predecessor and what is online.
Customer: replied 1 year ago.
Expert:  bigduckontax replied 1 year ago.

Hello Gavin. I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Part 1. Franked Investment Income comes to the company tax free and although it forms part of the profits of the company is not included in the Corporation Tax (CT) computation.

Part 2. Shares held by the company are merely quoted as a different class of assets in the balance sheet, usually in two forms depending on whether the investments are likely to be held in the short or in the long term. Any profit or loss made on the sale of shares throughout the year are posted to the profit and loss account.

I do hope that you have found my reply of assistance.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4429
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.