Section 62 | Meaning of “relevant profits” in section 61

(1)This section applies for the purposes of section 61.

(2)“Relevant profits”, if the dividend is paid for a specified period, means—

(a)the profits of that period, plus

(b)if the total dividend exceeds the distributable profits of that period, so much of the distributable profits of preceding periods as is equal to the excess.

(3)“Relevant profits”, if the dividend is not paid for a specified period but is paid out of specified profits, means those profits.

(4)“Relevant profits”, if the dividend is paid neither for a specified period nor out of specified profits, means—

(a)the profits of the last period for which accounts of the body corporate paying the dividend were made up which ended before the dividend became payable, plus

(b)if the total dividend exceeds the distributable profits of that period, so much of the distributable profits of preceding periods as is equal to the excess.

(5)In subsection (2)(b) or (4)(b), the reference to distributable profits of preceding periods does not include—

(a)profits previously distributed, or

(b)profits previously treated as relevant profits for the purposes of section 58 or 61 of this Act, section 799 of ICTA or section 506 of the Income and Corporation Taxes Act 1970.^F1

(6)For the purposes of subsection (2)(b) or (4)(b), the profits of the most recent preceding period are first to be taken into account, then the profits of the next most recent preceding period, and so on.

(7)In this section “distributable profits”, in relation to a period, means profits available for distribution of the period.

(8)The reference in subsection (5)(b) to section 799 of ICTA is without prejudice to the generality of paragraph 4(1) of Schedule 9 (references to rewritten provisions include references to superseded provisions).