Taxes Consolidation Act 1997 Schedule 32 paragraph 6

Distributions Out of Certain Income of Manufacturing Companies — Provisions Relating to Relief for Certain Corporation Profits Tax Losses

Paragraph 6 provided rules for calculating the tax credit attaching to distributions made by manufacturing companies that had both manufacturing income taxed at the 10 per cent rate and unrelieved corporation profits tax losses carried forward from 1975–76.

• Where a company had manufacturing income chargeable at the effective 10 per cent corporation tax rate under Part 14 and also had unrelieved corporation profits tax losses from 1975–76, special rules applied to the calculation of tax credits on distributions.
• The relief for pre-1976 losses under paragraph 18 was given as a deduction from corporation tax payable rather than as a deduction from income, making it necessary to translate that relief into an equivalent income-based deduction for distribution purposes.
• The paragraph set out the mechanics for converting the tax-based relief into the income-based equivalent needed to compute the correct tax credit attaching to distributions from profits taxed at the 10 per cent rate.
• The paragraph was repealed with effect from 6 April 1999, as tax credits no longer attached to distributions made on or after that date.