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Question 4 Imputation Credits (IC) AND Look Through Companies (LTC's) (Total: 5 marks) Part A:...

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Question 4 Imputation Credits (IC) AND Look Through Companies (LTC's) (Total: 5 marks) Part A: Imputation Credits (ICL[3 marks) Farah Hakim owns 1,200 shares in Mercury Energy Ltd (MCY), a company listed on the New Zealand Stock Exchange (NZX). MCY keeps an imputation credit account as required under tax law. On 17 August 2021, MCY declared a fully imputed final dividend of 10.2 cents per share to be paid to shareholders on 6 November 2021. (a) Explain how imputation credits attached to dividends paid to New Zealand tax residents prevents double taxation. (1 mark) Question 4 (a) Answer Imputation credits attached to dividends paid to New Zealand tax residents to prevent double taxation by allowing a resident company to pass on the benefits of income tax that has been paid to its shareholders. (b) Calculate: (0) The total imputation credits attached to the dividends Farah will receive The total RWT on the dividends. Page 5 of 12 ACCT604 S2 2021 Student ID Number: 17976598 Student Name: Uputaysia The total net dividends Farah will be paid. The total gross dividend. (iv) (2 marks)

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