INTM254640 | Controlled Foreign Companies: exemptions - Acceptable Distribution Policy ('ADP'): Distribution standard

The ADP exemption was abolished in FA09 for accounting periods of CFCs beginning on or after 1 July 2009. This guidance only applies to APs ending on or before 30 June 2009

ICTA88/SCH25/PARA2(1)(d) and 2A(6)

Once established, the dividends paid for an accounting period of a controlled foreign company are compared with the chargeable profits of that period to see if the distribution standard is satisfied. For this purpose, only dividends paid to United Kingdom residents are taken into account (but see INTM254700) regarding dividends paid to non-residents). Dividends must represent at least 90% of the net chargeable profits.