Taxes Consolidation Act 1997 section 154

Attribution of distributions to accounting periods

Section 154 allows a company to elect which accounting period a distribution should be attributed to, overriding the default rule that a distribution is treated as made for the immediately preceding accounting period.

• A company may specify in writing, within six months of the end of the accounting period in which a distribution is made, the accounting period or periods (up to nine years back, or further in certain cases) for which the distribution is to be treated as having been made.
• The amount attributed to any accounting period cannot exceed the undistributed income for that period; a company may go back beyond nine years only where the undistributed income of the intervening periods has been fully absorbed.
• A company generally cannot attribute a distribution to the accounting period in which it is actually paid, with limited exceptions including interim dividends paid before 1 January 2003, certain interest treated as distributions, preference share distributions, and distributions in first or final accounting periods.
• Undistributed income is calculated as the company's taxable income less corporation tax, plus distributions received, less distributions already attributed to that period — and where distributions for a period exceed its distributable income, the excess is deemed made for the immediately preceding period, cascading backwards as necessary.