Also, the company said that for Canadian resident shareholders, this dividend is designated as an "eligible" for purposes of the enhanced
dividend tax credit rules contained in the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation.
An enhanced
dividend tax credit applies to eligible dividends paid to Canadian residents.
An eligible dividend paid to a Canadian resident is entitled to the enhanced
dividend tax credit.
That was before the complications of the changes in the taxation of dividends announced in last year's budget; the abolition of the
dividend tax credit; new rates applying to dividends; the introduction of a PS5,000 dividend allowance reducing to PS2,000 - and a new saving allowance.
Under these changes, the
dividend tax credit will be abolished, and while the first PS5,000 of dividend income will be tax free, higher and additional rate tax payers will be due to pay tax at 32.5% and 38.1% respectively.
A
dividend tax credit mitigates the tax, however, the net income is still $138.
Chancellor George Osborne said the Government will abolish the
dividend tax credit from April 6 next year and introduce a new Dividend Tax Allowance of PS5,000 a year.
UKIP would also reduce the annual limit for tax relievable pension contributions to PS10,000 gross and reinstate the
dividend tax credit at 20%.
With the prospect of seeing Stamp Duty on AIM shares abolished at the start of the next tax year, the tax advantages of investing on AIM could be four-fold: no Stamp Duty, no Capital Gains Tax (CGT), no additional tax on dividend income (any investment dividends are received with a 10 per cent
dividend tax credit which cannot be reclaimed) and subject to certain criteria, no IHT.
The audit note criticizes the fact that dividends from Canadian corporations qualify for the
dividend tax credit even when they are paid out of foreign source income that has not been subject to either Canadian or, in many cases, foreign income tax.
After two years of refusing to comply with The Freedom Of Information Act, Gordon Brown has finally been forced to release the information that he was warned by experts in 1997 that removing the
dividend tax credit on occupational pensions would lead to thousands of workers, like former ASW staff, losing most or all their promised pensions.