CTM20055 | ACT: General: Distributions

ACT ('Advance Corporation Tax') was abolished for all distributions made on or after 6 April 1999. The guidance at CTM20000 onwards explains the position before 6 April 1999.

Companies may still obtain relief for unrelieved surplus ACT as at 6 April 1999. There is guidance on this in the section on 'shadow ACT' at CTM18000 onwards.

Before 6 April 1999, a company resident in the UK had to account to the Revenue for ACT calculated by reference to the amount or value of any qualifying distributions, CTM20070, made by it. Even companies that were exempt from CT or had a nil CT charge had to account for ACT.

FID ('Foreign Income Dividends') and other qualifying distributions were dealt with separately.

Franked investment income was set against franked payments, while FID received were set against FID paid. The FID provisions are dealt with at CTM21000 onwards.

As regards

• the effect of franked investment income or FID received on the amount of ACT the company had to pay, see CTM20060 and CTM21220,

• group income elections under ICTA88/S247 (1) by companies to pay dividends other than FID to certain other companies without having to account for ACT, see CTM80070,

• the machinery for collecting ACT in ICTA88/SCH13, see CTM22000 onwards.