How should I treat Franked Investment Income on a CT600?

Franked Investment Income (FII) is the name for UK dividends that a limited company receives from another company.

To record FII on a CT600:

SimpleStep

CT600 Core > Trade and Professional income > Tax adjusted profit/(loss) worksheet – disallowable expenditure > proceed with steps 1-4 (listed below)

HMRC Forms

CT600 Core > Computations> Tax adjusted profit/loss-disallowable expenditure > proceed with steps 1-4

  1. Enter the accounting profit into the box labelled Profit/(loss) on ordinary activities before taxation.
  2. Open Tax adjusted profit/(loss)worksheet – other adjustments.
  3. Enter the FII into the box labelled Net dividends received from other companies (make sure to only complete the Gross FII received box, if you are not looking to include this as an add back).
  4. Enter the taxable value in Box 38 (2008 form) or Box 620 (2015 form). This is normally the same as the amount added back but in some cases can be different.

NOTE: TaxCalc won't include FII when calculating corporation tax because this would tax the dividend twice. This is because the company issuing the FII has already paid corporation tax on it.



Article ID: 834
Last updated: 23 Mar, 2021
Revision: 7
Tax Return Production -> How should I treat Franked Investment Income on a CT600?
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