Whitefield’s Tax Status

Whitefield pays income tax on its net taxable investment income at the company tax rate, and is entitled to the benefit of franking credits it receives.

Whitefield pays tax at the company tax rate on any net realised capital gains. In addition, Whitefield obtains the benefit of LIC Discount Capital Gains status on a large percentage of its capital gains.

In this way when Whitefield makes a qualifying LIC discount capital gain, the net gain may be paid to Whitefield’s underlying shareholders as a fully franked LIC discount dividend. Where this occurs, individual shareholders receiving the LIC discount dividend are entitled to claim a tax deduction equivalent to 50% of the gross LIC Discount Capital Gain. (Superannuation fund shareholders are entitled to a deduction for 33% of the Gain).

For example, an individual shareholder with a marginal tax rate of 46.5% pays tax at the effective rate of 23.25% on qualifying realised capital gains made by Whitefield and distributed to shareholders.

Capital gains made by Whitefield which are not qualifying discount capital gains, are subject to tax in the normal way at company tax rates.