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The value of dividend imputation tax credits in Australia [An article from: Journal of Financial Economics]
Book Details
Author(s)D. Cannavan, F. Finn, S. Gray
PublisherElsevier
ISBN / ASINB000RR1578
ISBN-13978B000RR1573
MarketplaceFrance 🇫🇷
Description
This digital document is a journal article from Journal of Financial Economics, published by Elsevier in 2004. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imputation credits affected their economic value. Before the amendment, tax credits were worth up to 50% of face value in large, high-yielding companies, but subsequently it is difficult to detect any value at all.
Description:
A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imputation credits affected their economic value. Before the amendment, tax credits were worth up to 50% of face value in large, high-yielding companies, but subsequently it is difficult to detect any value at all.
